DailyTrends.com Company of the Week: Jupiter Marine (JMIH)
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Here is another clean cut business that I can understand. Warren Buffet was right when he said that he only invests in companies that he can comprehend. Jupiter Marine makes boats. The company designs, makes, and markets a diverse mix of high quality sportfishing boats under the Jupiter brand name. Jupiter Marine boats are specifically designed to run at high speeds in offshore sea conditions while, at the same time, providing passengers with a smooth, comfortable and amazingly dry ride under adverse conditions.
Like a luxury car. Fast on the outside, nice and calm on the inside.
The outboard powered product line currently consists of five models of boats, including the 31' Open Center Console, 31' Cuddy Cabin, 31' Forward Seating Console, 27' Open Center Console and 27' Forward Seating Console. Company's Web site address is www.jupitermarine.com and everyone here should go to it, just to see how beautiful a hand-made boat can be.
I think the one man who is the captain of this corporate ship is Carl Herndon, Jupiter's president. Herndon is best known as the founder and CEO of Blackfin Yacht Corporation and former president of Bertram Yacht where he earned the reputation for building some of the world's best and most respected sportfishing yachts. The Jupiter team includes many of the same experienced managers and skilled craftsmen who have worked with Carl over the years in a proven tradition of providing maximum offshore performance, superior quality, and meticulous craftsmanship in the boats they build. I spent time this week with none other than Carl Herndon, so that members can learn firsthand from a master shipbuilder.
Chris Lahiji (DailyTrends.com): Carl, when and how did you get into this business? Has the boating industry changed within the last 15-20 years?
Carl Herndon (President of Jupiter): I entered the marine industry while still in college, and have been in it ever since. The boating industry has changed substantially in the past 20 years. I believe the most significant change in boating has been the evolution from single purpose uses into a full-blown family-oriented activity.
Chris Lahiji: When did Jupiter Marine come to existence? Did you have any role to play with the company from its inception?
Carl Herndon: Jupiter was originally formed in 1989 and was a small mom and pop operation until 1998 when the company was purchased by myself and a group of investors.
Lahiji: How many years has Jupiter been profitable? Is your business seasonal?
Carl Herndon: Jupiter has been profitable since fiscal year 2003. It would have been sooner had it not been for the negative effects of 9/11. Our business has not been seasonal and our quarters are fairly consistent.
Lahiji: How well did Jupiter do last year in terms of revenue and income? Do you think 2005 will be another banner year?
Carl Herndon: Jupiter has enjoyed increased sales and earnings for the past 3 years and I see no reason for the trend not to continue. Revenue from last year was $10,260,684.00, a 10.3% increase over the previous year. Income was up 52.5% at $334,830.
Lahiji: What is your current backlog? Do you guys think that you can make boats as fast as the orders come in with the current employee base and facilities?
Carl Herndon: Our current backlog is approximately 6 months. We feel we can build enough boats to satisfy demand, but additional growth will require the hiring of more production employees.
Lahiji: Do you ultimately want to be bought out, or continue to grow the business?
Carl Herndon: At this point, our goal is to continue to grow the business and capitalize on our reputation.
Lahiji: Lastly, does any employee of yours get seasick?
Herndon: None that will admit to it.
END OF INTERVIEW
FINAL ANALYSIS OF LAHIJI
Members, I think this company has financial statements that are outstanding. The entire market cap of the company is close to $4 million. It currently has almost two million in net tangible assets, a backlog of boat orders for six months, and record income.
On December 14th, the company announced 1st quarter results and they were terrific. Net sales for the first quarter of fiscal 2004 increased 26.2% to $2.8 million from $2.2 million last year. Net income applicable to common shareholders increased 27.2% to $162,000, or $0.01 per diluted share.
A couple days later they announce that they go to a boat show, and get another $2 million dollars in orders for 12 new boats.
Simply impressive. This one is a keeper for another year in my opinion.
Chris Lahiji will be available to take your questions until Thursday, February 3. Please use the form below to submit your questions.