MRAA/Baird/Trade Only Marine Retailer Pulse Report
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August 6, 2021 MRAA/Baird/Trade Only Marine Retailer Pulse Report July 2021 Craig Kennison, CFA Matt Gruhn Senior Research Analyst President, MRAA ckennison@rwbaird.com 763.333.2421 414.765.3870 PLEASE REFER TO APPENDIX – IMPORTANT DISCLOSURES AND ANALYST CERTIFICATION AT END OF DOCUMENT
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Overview Robert W. Baird, in partnership with Marine Retailers Association of the Americas (MRAA) and Soundings Trade Only, is pleased to present the July 2021 Marine Retailer Pulse Report. We recently surveyed 96 marine retailers to assess recent trends in North America. Thank you to each of the retailers who participated in this survey. If you have any questions or comments that you would like to direct to MRAA, please contact Matt Gruhn, President of MRAA, at 763.333.2421. If you have any questions or comments, would like additional research on the marine industry, or are a retailer and would like to participate in our next survey, please email Senior Analyst Craig Kennison [ckennison@rwbaird.com]. Note: This is not a scientific survey, rather it is meant to give investors an indication of current industry trends. Some quotes have been edited to protect the anonymity of respondents. Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 3
Table of Contents
Marine Retailer Pulse Report
Retailer Profile 5
Retailer Sentiment 6
Retail Trends 7–8
Inventory 9
Comments 10 – 17
Key Statistics
Macro Overview 18 – 19
U.S. Powerboat Retail 20 – 22
U.S. Retail by Category 23 – 25
Stock Performance 26
Stock Seasonality 27
Disclosures 28 – 32
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 4Retailer Profile 96 retailers participated in the MRAA/Baird/Trade Only Marine Retailer Pulse Report. Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 5
Retailer Sentiment We have established the first Marine Retailer Sentiment Index, capturing both current and longer-term (3-5 year) retailer sentiment. Sentiment on current conditions improved from June and remains positive (60 vs. 55) even as inventory issues frustrate dealers. The 3-5 year outlook also improved (59 vs. 55 in June). For context, sentiment readings can range from 0-100, with 50 providing a “neutral” outlook. Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 6
Retail Results
July Retail Trends
46% of dealers reported a retail decline in July,
versus 36% reporting growth. Commentary suggests
limited dealer inventory levels is limiting the amount
of retail sales.
Used boat retail trends were similar, with 45%
reporting a decline versus 38% reporting growth.
July typically represents ~12% of annual retail sales.
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 7Retail Demand Factors July Retail Trends Retailers indicated that the economy positively impacted demand in July, but that new products and trade-in activity were headwinds. Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 8
Inventory New boat inventory remains incredibly lean, with 100% of dealers again reporting new boat inventory was “too low” and no dealers reporting “too high.” Used boat inventory is also very lean, with 97% of dealers responding it is “too low,” and none responding “too high.” Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 9
What’s Working
√ Comments
“ If it's available and works, it sells. Demand is high.”
“ Saying no to the “older product” as far as servicing. Treat everyone the same.”
“ If you can't sell boats in the market, sell now.”
“ With nothing to sell its hard to make any comments.”
“ Online sales.”
“ Selling is easy at the moment, but...”
“ All boat motor and accessory items, electronics, pontoons, bass boats, and water toys.”
“ On lot boat show.”
“ Good lot displays... Honest pricing , interest rates.”
“ Selling by showing customers boats that are in for service.”
“ Focusing on brands that have stock and can keep us reasonably stocked going forward. Staying focused on our specialties.”
“ Good information is helpful. Actually knowing a production date has value.”
“ Calling customers we sold boats to 2 - 5 years ago and offering to buy them back.”
“ Lots of first-time buyers, or those who boated years ago and interested again.”
“ Pre-selling and ordering boats for later in year.”
“ Any electronics have driven the service department.”
“ Great salesmanship!”
“ Demand and a hot summer are keeping inventory at historic low levels.”
“ If it floats and runs it sells.”
“ Pontoon demand is high.”
“ Digital marketing in letting our customer base know that if they want a new boat for next year, it needs to be ordered now.”
“ Anything new has sold. Customers are placing deposits for boats to deliver to them by (hopefully) next Spring/Summer.”
“ Anything that floats.”
“ Being persistent on getting boats and motors to sell. While many dealers are out of boats, we have been able to have a steady stream of new inventory coming
in every month.”
“ Hewescraft continues to provide the best dealer experience as far as getting the boats they say they will out, as well as staying in good contact and sending a
bunch of progress pictures and letting me know exactly what is going on so I can pass it along to my customers.”
“ Everything is selling.”
“ Customer service.”
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 10X
What’s Not Working
Comments
“ Customers are coming in frustrated with availability before they even inquire about a product.”
“ No inventory.”
“ Selling 11 month lead times.”
“ Taking boats to shows.”
“ We don't have enough to sell.”
“ Need inventory.”
“ Right now, no marketing needed. Hot, hot market.”
“ Engine availability, propeller availability, long wait times on ordered product.”
“ Try to be a commodity electronics supplier for Garmin, Navico, Standard Horizon etc. Channel prices are all over the place, there is no stock yet some big
suppliers seem to be getting stock somehow. So we are exiting from selling those brands.”
“ Yamaha’s inability to deliver or more importantly communicate delays has been very difficult to keep customers informed.”
“ Lack of inventory. Inability to fill open employment positions. Lack of communication from builders and engine companies with regards to updated lead times
and just being kept in the loop in order for us as dealers to keep our customers informed.”
“ Finding staff at any level.”
“ Lack of new boat inventory has hurt the dealership all around.”
“ Product shortages at all levels make final rigging a boat to be very difficult. It is hard to project what does not show up, or where to find it.”
“ Supply, quality of products out of some of our boat manufacturers.”
“ Can't seem to find qualified staff to add in areas we need them. Prop shortages from some motor manufacturers.”
“ Quality is going down the toilet. Too much of a rush to push boats out. Under-trained employees in the factory because no one wants to work.”
“ Lack of new stock boats to sell. Just about every boat we have on order has a deposit on it and the factory is unable to increase production to meet increased
demand.... Meaning very few stock boats to display.”
“ Our Brunswick brand manufacturers not keeping up with other brands we represent. More production issues, more delays, more excuses.”
“ Asking people to order products when you can't tell them what it will cost or exactly when it will arrive.”
“ Used boats. No customers are trading in their used boats. They are selling themselves online for a lot more money.”
“ Yamaha engines! I am so frustrated with Yamaha and their lack of engines. I understand the supply issues were out of their control, but how they have
responded to try to fix things has been less than impressive. I shifted to Honda completely just because they have doing better than Yamaha getting thing to
me.”
“ Can’t get mechanics or employees in general. We are fighting our government as they continue to reward those who chose not to work. It not only effects the
shop but the retail supply because manufacturers can’t hire employees.”
“ As a yacht broker the diminishing inventory is an issue.”
“ Customer patience.”
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 11Boat Shows Does the lack of inventory and other supply-chain challenges change your decision on whether to attend boat shows this fall and winter? We asked dealers about their approach to boat shows this fall and winter. Amid a lack of inventory, roughly three-quarters of dealers reported that their decision on whether to attend boat shows is impacted by inventory shortages and supply chain challenges. Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 12
Boat Shows
Please comment on your approach to boat shows and other regional events this year.
“ NY Show has been a quiet show for the towboat market, so our dealership has been contemplating each year for the last several years, to not
attend the show. With limited build slots (if any) remaining by January, we will be happy to save the money and stay home from shows this
year.”
“ I just don’t know if we will have any inventory to bring.”
“ No inventory, and we cannot get enough boat inventory for next year...why waste the money on a show?”
“ We will not attend the Fall Show still planning on attending the Spring Show.”
“ Not going, we need to rethink boat shows as an industry. Our customers are ready to adapt to a new way of doing business.”
“ If we cannot get boats now due to lack of product, going to a show isn’t going to help a thing except to make dealers even more aggravated.
We will not sell a customer their own boat based on unethical answers we are being given for timelines. 8 months is to long from order entry
until only getting partial delivery. Pretty sad.”
“ Show & Book orders for the boats on order from the manufacturer.”
“ There should not be any indoor large boat shows. There is not enough inventory and not enough unsold production that justifies the dealer's
expense. This situation will pass and things will return to " normal," at that time dealers should return to shows if they choose. If a dealer
can't justify a show this year will they lose their spot in the show in the coming years?”
“ No need to show with all inventory sold for next year.”
“ No interest in boat shows. We have learned how to successfully sell without the expense and distraction of boat shows.”
“ This year will be an inflection point for the future of boat shows. Dealers all seem to agree that shows have value, but that the return vs. Cost
has become questionable at best. Do the millions of dollars spent at a major regional show really grow the industry that much, or in the end
has everyone begrudgingly gone mostly to keep up with the competition? As of now we already can't satisfy demand, so why spend the
millions? Let's invest in our businesses instead!”
“ Covid gave us the confidence to say we do not need to attend all the boat shows we attend. We will reduce our attendance or size.”
“ Shows are necessary for dealer networking!!”
“ No way will we be attending any boat shows this year!”
“ The boat companies tell us we will not have many boats by January to display at boat shows. So why go and spend a lot of time and money
with much fewer boats to display. The Boat Companies are not going to financially participate in boat shows going forward so 100% of the
costs are the dealer's responsibility. Also, the boat companies and motor companies have announced there will be NO boat show Rebates. So
what is the incentive to the customer to buy at a boat show? NONE!! We sold more boats this past year with no boat shows and saved over
$200,000 in expenses. It really is a simple decision not to attend boat shows going forward.”
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 13Boat Shows
Please comment on your approach to boat shows and other regional events this year.
“ See you at FLIBS!”
“ We will attend boat shows with less product this year as most dealers not able to get but working on new ideas for shows
“ We had one show for spring 2022 already cancelled. The other show we haven't committed to exact floor space yet because we don't know
what we will have to bring.”
“ Not too sure they will be effective. Could give customers a bad taste due to low selection and lack of manufacturer incentives.”
“ Will not attend our local boat show. Will have an on-lot show instead.”
“ Being there is important. We meet our customers, we meet new boaters, we meet new boaters/customers and remain highly visible. We are
addressing the temporary inventory supply on our terms, and we tell our own story about our business, boats and the boating lifestyle. We
need to be at our shows to successfully do these things. We're always eager to meet with our customers and all boaters/consumers to
continuously learn about their needs and thought processes, especially during this unusual space of time. Shows always keep us in a learning-
mode regarding competitors and the market.”
“ We are unsure if we will be able to get enough product to attend a show. If we do sign a show contract, it will be for 1/2 space or less than
normal.”
“ We have 4 dealership locations in Texas. We do not participate in any local or regional shows. We send sales team to Ft. Lauderdale and Miami
to work the international shows.”
“ Less participation.”
“ With no inventory it is likely there will not be a boat show.”
“ We will need less space if we cannot get product to display. We have limited confidence in our manufacturers to deliver the product they have
committed to deliver.”
“ The shows have fundamentally changed, and that is a good thing. We need to follow the auto industry and use the shows to showcase only
new products and move the focus away from transactional sales.”
“ The shortfall in new production and components to allow builders to produce finished product and deliver will not allow a good display of
product for shows. Coupled with the cost of shows and the savings that were realized from the previous year's shows, and the huge increase
in costs will dampen shows for years to come.”
“ We plan to have as much inventory as we can for the Seattle boat show this year. We ordered a few boats that are specifically for the boat
show. We will have to see what we can come up with. It will be hard to keep inventory that long. Once boats show up here, they have been
selling within the day, sometimes within an hour or two from arrival is all.”
“ Hope that we don’t have shows. All in coming inventory is sold and see no stock for at least a year. If you have inventory you have to
reevaluate your approach or your brands. Shows would only create an unnecessary overhead.”
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 14Boat Shows
Please comment on your approach to boat shows and other regional events this year.
“ If, if I attend it will be reduced to 2 boats from 8; or a booth... I cannot get boating products until next fall.”
“ Likely will not have enough inventory to attend the 2022 Atlanta Boat Show.”
“ Not sure if I will have enough boats in stock to make a reasonable display. Why would I pay money to go to a show when I can sell everything
I can get my hands on without going?”
“ It will be a new Dealer paradigm to potentially display and show product this Fall/Winter but not be able to provide said product in the spring.”
“ Shows are exhausting and to be honest are not profitable in the end. Yes, you sell a lot but are you really making profit. Our local boat show
was cancelled early this year and we still did a decent amount of sales and much better profit. I'm inclined to not do boat shows in the future.”
“ No boats for fall shows. Unsure about having enough inventory for winter shows. May not be enough stock boats.”
“ We will display at shows, however our used boat displays may be much smaller due to lack of inventory.”
“ Will most likely not be in attendance unless manufacturers can secure additional inventory. Based on current projections we could be sold out
by the end of the calendar year.”
“ Lack of inventory will make it difficult to fill our boat show space. Can't remember the last time we put a customer boat in a show and can't see
any upside for the owner.”
“ We haven’t decided whether we will do shows yet. They certainly aren’t needed to sell product. Still, it is helpful for public relations if nothing
else.”
“ No need for shows at this point.”
“ Probably not attending, will be doing in-house show / promotions instead.”
“ Boat shows are obsolete.”
“ It’s tough to not go when other dealers will be going. I’m concerned when people go to a show this year and see very little compared to years
past, does this damage the show’s reputation with the public.”
“ Our spring shows were very successful and gives us confidence to proceed with fall & winter shows. We have firm commitments from the
builders ensuring new models will be available for the upcoming show schedule.”
“ We are in limbo as to what inventory will be available for a promotion in 3 weeks any less boat shows for this winter.”
“ No inventory no reason to promote at a show, Skip the show.”
“ Probably will not display brands that are totally sold out for the year. Will only participate with brands that we have available product.”
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 15Boat Shows
Please comment on your approach to boat shows and other regional events this year.
“ Not sure we will attend in February (Calgary). Sales have been poor the last number of years. Looking at our own virtual show, or simply our
own in-house show, with a large marketing budget that normally would go to buying space!”
“ Booth Space is going to be a lot smaller.”
“ We will not have stock inventory to display as neither of the two brands we sell will be able to keep up with the sold units that are in their
systems. We will still cover the floorspace cost of attending the show and hope to have 2022 customer boats to show that will arrive in the
winter.”
“ Still working on Boat Show plans vs in store promotion.”
“ Will not be attending any off-site showings or events.”
“ Boat show is a non-event.”
“ We should be able to have a boat show here in Sacramento next spring. I think this will be good for the local boat dealerships in Northern
California. Helpfully by then we will have some inventory to show or we will arrange with our customers to use their boats for display.”
“ Will be doing in-house only. Will likely visit the large ones vs. Being there as a vendor.”
“ With limited inventory and pre-selling 2022's right now, there will not be a reason to attend the boat show next year.”
“ We will go might have to spread the boats out a little more to make it look full.”
“ May hold an open house in December if inventory allows.”
“ We will be taking less boats.”
“ How can you attend a boat show with no new boats to show?? We are still attending our Fall Boat Show to support the Michigan Boating
Industries Association but have substantially cut back on our space due to lack of product to display. We do not see an increase of available
boats to display going into the Winter Boat Show's either, meaning our display space at the Detroit Boat Show will be very small.... Not worth
renting 12,000 sq ft and only showing a handful of boats.”
“ Too early to determine whether we will attend shows.”
“ Going to use boat shows to introduce new people to other aspects of our business.”
“ If no boats then no shows.”
“ Our fall shows will not go on due to a total lack of inventory. The NY show has been pushed by one manufacturer of our and they will get us
boats for that display.”
“ As long as Covid-19 is rampant I will not attend a boat show or any other large gathering.”
“ Do not see reason to attend other than fighting for common potential prospects.”
“ We have no inventory to take to a boat show.”
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 16Additional Comments
“ Used boat pricing is beginning to be questioned more than before. The question of price "in a normal market..." is coming up more and more.
As the season is winding down, the desperation to get a boat and willingness to pay full price will decline.”
“ Factory visits are very strong for closing.”
“ Inflation signs are everywhere. The governments need to recognize this and plan for a soft landing instead of cranking more dollars into the
economy & making things worse.”
“ Very frustrated with motor companies. Brunswick in particular - lack of ownership in customers that are buying their product with no answers.”
“ Communication from the manufacturers has been awful. We don't know if it is because they don't know what is going on, or they are afraid to
tell the dealers the truth. But we feel as if we are being strung along on many matters from multiple vendors.”
“ Need inventory--losing sales on timing.”
“ Never in 40 years has government at DC level been so incompetent and corrupt!”
“ Government paying people to not work is the biggest problem with the manufacturing labor force.”
“ The supply chain issues are going to run into at least 3rd quarter 2022.”
“ Been terrific having virtually no flooring costs. Those savings go directly to the bottom line. We have been able to sell off all aged inventory,
including outboards, accessories etc. The cleanest we will have been in 18 years going into the fall.”
“ Lack of a quality product from the boat builders has made the brand name suffer more than they know. It shows at the dealership and to the
public.”
“ We all must work extra hard to communicate product delays to help keep the consumer up to speed and informed. Additional time is required
to ensure the new boater has the information and training on the water to insure a positive experience.”
“ Have not had any open inventory for customers to look at since the 1st of May.”
“ Lack of Yamaha engines. We have several boats sitting at the dealership and at the factory waiting for the larger (250-300 HP) Yamaha
Outboards. Most customers are still hanging in there waiting for their boats-with engines- to arrive. It is sad that some people who ordered last
Fall will not see their new boat until September - just in time to store it for the Fall/Winter. We are starting to see our new buyers asking for
Mercury engines since the word is out there about the lack of Yamaha big engines.”
“ I am just lucky to get to be able to sell Hewescrafts. Best aluminum boat on the market hands down.”
“ Manufacturers need to improve communications with dealers.”
“ Boating surge and interest is back to 'normal,' people seem back to pre-pandemic, see pandemic issues bubbling and wondering how second
wave will affect business in 2022”
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 17Consumer Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 18
Wealth Effect Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 19
U.S. Powerboat Retail Dollar Sales Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 20
U.S. Powerboat Retail Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 21
U.S. Powerboat Retail Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 22
U.S. Retail by Category Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 23
U.S. Retail by Category Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 24
U.S. Retail by Category Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 25
Stock Performance Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 26
Stock Seasonality
Brunswick Monthly Excess Return versus S&P 500
assumes reinvested dividends
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 -22% -4% 15% 6% -4%
2012 14% 8% 5% 3% -10% -2% -2% 6% -7% 6% 9% 12%
2013 19% 0% -10% -9% 4% -3% 13% -1% 7% 9% -1% -2%
2014 -6% 4% 0% -12% 5% -4% -3% 3% 0% 9% 4% 4%
2015 9% -5% -3% -4% 1% 2% 2% 0% -1% 4% -2% -2%
2016 -16% 8% 6% 0% -2% -5% 6% -7% 6% -9% 12% 7%
2017 8% -3% 2% -8% -3% 13% -12% -7% 5% -12% 7% -1%
2018 8% -5% 7% 1% 4% 1% -4% 1% 0% -15% 1% -3%
2019 0% 2% -6% -2% -12% 4% 6% -3% 10% 10% -2% -1%
2020 5% -7% -21% 22% 11% 15% -1% -14% -1% 11% 7% -2%
2021 12% 1% 8% 10% -5% -4% 2%
10-Year
6% 0% -2% 0% -1% 1% 1% -4% 1% 3% 4% 1%
Average
% of Years
80% 50% 60% 40% 50% 50% 50% 40% 50% 70% 70% 30%
Outperformed
Source: FactSet, Baird research
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 27Appendix – Important Disclosures and Analyst Certification Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 28
1 Robert W. Baird & Co. Incorporated makes a market in the securities of BC, MBUU, MCFT and ONEW.
2 Robert W. Baird & Co. Incorporated and/or its affiliates managed or co-managed a public offering of securities of OneWater
Marine Inc. in the past 12 months.
3 Robert W. Baird & Co. Incorporated and/or its affiliates have received investment banking compensation from OneWater
Marine Inc. in the past 12 months.
Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 29Robert W. Baird & Co. Incorporated (“Baird”) and/or its affiliates expect to receive or intend to seek investment-banking related compensation from the company or
companies mentioned in this report within the next three months. Baird may not be licensed to execute transactions in all foreign listed securities directly. Transactions in
foreign listed securities may be prohibited for residents of the United States. Please contact a Baird representative for more information.
Investment Ratings: Outperform (O) - Expected to outperform on a total return, risk-adjusted basis the broader U.S. equity market over the next 12 months. Neutral (N) -
Expected to perform in line with the broader U.S. equity market over the next 12 months. Underperform (U) - Expected to underperform on a total return, risk-adjusted basis
the broader U.S. equity market over the next 12 months.
Risk Ratings: L - Lower Risk – Higher-quality companies for investors seeking capital appreciation or income with an emphasis on safety. Company characteristics may
include: stable earnings, conservative balance sheets, and an established history of revenue and earnings. A - Average Risk – Growth situations for investors seeking
capital appreciation with an emphasis on safety. Company characteristics may include: moderate volatility, modest balance-sheet leverage, and stable patterns of revenue
and earnings. H - Higher Risk – Higher-growth situations appropriate for investors seeking capital appreciation with the acceptance of risk. Company characteristics may
include: higher balance-sheet leverage, dynamic business environments, and higher levels of earnings and price volatility. S - Speculative Risk – High growth situations
appropriate only for investors willing to accept a high degree of volatility and risk. Company characteristics may include: unpredictable earnings, small capitalization,
aggressive growth strategies, rapidly changing market dynamics, high leverage, extreme price volatility and unknown competitive challenges.
Valuation, Ratings and Risks. The recommendation and price target contained within this report are based on a time horizon of 12 months but there is no guarantee the
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Distribution of Investment Ratings. As of July 30, 2021, Baird U.S. Equity Research covered 737 companies, with 65% rated Outperform/Buy, 34% rated Neutral/Hold and
1% rated Underperform/Sell. Within these rating categories, 17% of Outperform/Buy-rated and 5% of Neutral/Hold-rated companies have compensated Baird for investment
banking services in the past 12 months and/or Baird managed or co-managed a public offering of securities for these companies in the past 12 months.
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Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 30A complete listing of all companies covered by Baird U.S. Equity Research and applicable research disclosures can be accessed at http://www.rwbaird.com/research- insights/research/coverage/third-party-research-disclosures.aspx. You can also call 800-792-2473 or write: Robert W. Baird & Co., Equity Research, 777 E. Wisconsin Avenue, Milwaukee, WI 53202. Analyst Certification The research analyst primarily responsible for the preparation of this research report certifies that the views expressed in this research report and/or financial model accurately reflect such research analyst's personal views about the subject securities or issuers and that no part of his or her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in the research report. Disclaimers This is not a complete analysis of every material fact regarding the company, industry or security and does not contain information sufficient upon which to base an investment decision. The information provided is for illustration purposes and does not constitute, nor should it be regarded as, investment research, a research report, a securities recommendation, a solicitation to buy or sell any security, nor an endorsement of any investment strategy. The information provided is as of this date and is subject to change. The information provided has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy. Baird prohibits analysts from owning stock in companies they cover. ADDITIONAL INFORMATION ON COMPANIES MENTIONED HEREIN IS AVAILABLE UPON REQUEST The Dow Jones Industrial Average, S&P 500, S&P 400 and Russell 2000 are unmanaged common stock indices used to measure and report performance of various sectors of the stock market; direct investment in indices is not available. Baird is exempt from the requirement to hold an Australian financial services license. Baird is regulated by the United States Securities and Exchange Commission, FINRA, and various other self-regulatory organizations and those laws and regulations may differ from Australian laws. This report has been prepared in accordance with the laws and regulations governing United States broker-dealers and not Australian laws. Other Disclosures The information and rating included in this report represent the research analyst’s views based on a time horizon of 12 months, as described above, unless otherwise stated. In our standard company-specific research reports, the subject company may be designated as a “Fresh Pick”, representing that the research analyst believes the company to be a high-conviction investment idea based on a subjective review of one or more fundamental or quantitative factors until an expiration date specified by the analyst but not to exceed nine months. The Fresh Pick designation and specified expiration date will be displayed in standard company-specific research reports on the company until the occurrence of the expiration date or such time as the analyst removes the Fresh Pick designation from the company in a subsequent, standard company- specific research report. The research analyst(s) named in this report may, at times and at the request of clients or their Baird representatives, provide particular investment perspectives or trading strategies based primarily on the analyst’s understanding of the individual client’s objectives. These perspectives or trading strategies generally are responsive to client inquiries and based on criteria the research analyst considers relevant to the client. As such, these perspectives and strategies may differ from the research analyst’s views contained in this report. Robert W. Baird & Co. Inc. Marine Retailer Pulse Report 31
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