Introduction
Denali Marine Group, LLC dba Coach Marine Group, is a Kansas Partnership with two (2) members, Wendell Payne and Chris Riddle. Their primary place of business is 3701 S. Johnson Rd. , Chanute, Kansas 66720. The business manufactures and sales Tri-toon water raft under the brands Xcursion and Coach. The Xcursion brand has been active since 2011 and Coach was created in 2018. The average boat invoice amount is approximately $56,250.00 and the business has maintained a gross margin of 25%. Approximately 70% of the unites include a outboard engine sold separately with an average invoice amount of $18,750.00 and maintaining a gross margin of 15%. The business leases 282,000 square feet of enclosed building with adequate loading, operating and storage facilities. The two (2) owners came together in 2010 and went to a contract manufacturer to bring luxury to the “Pontoon” boating market. After eight (8) years of frustration to get to the level of quality that this market deserved, they decided to just build their own boats, their design(s) were already in tack. Starting from the beginning they redesigned the aluminum chassis, the decking and the entire look and feel of the boat. The same innovation process that made the original Xcursion boats so popular was expanded to the entire boat which resulted in a more refined, durable and better riding tri-toon than anywhere else in the market. Both brands, Xcursion and Coach, boats are certified by the National Marine Manufacture’s Association (NMMA) for safety and performance.
Team
The business is headed up by our two (2) owner’s, Wendell Payne and Chris Riddle. Wendell Payne does all design aspects for the boat’s mechanics, controls and chassis. As he has more than 30 years in the marine industry as a successful boat dealer and designer.
Chris Riddle, who grew up in the marine industry, has more that 25 years as a Manufacturing Representative and is connected to all aspects of the market.
Problem
The recreational watercraft market has long been divided between ski, fishing, performance and pleasure cruising segments. Each type of boat has it’s own niche priorities without addressing the entire spectrum of customer needs. The comfortable Pleasure Cruisers could not provide the desired performance and the Ski boats were uncomfortable to sit in for longer runs. Neither of these boats could provide the access needed for an acceptable fishing platform.
Solution
Beginning with Xcursion and then with Coach boats, the comfortable furniture pack of the Pleasure Cruiser was installed on a chassis that can reach 44 MPH with a 250 horsepower engine.
Our chassis also handle as well as the best ski boat and provides a flat deck access for fisherman. Combining these disparate aspects of boating allow a customer to meet all of their needs with one watercraft. From the sporty “Arch” boats to the plush bench seats, these boats appeal to the entire spectrum of customers young and old.
Business Model
Denali Marine Group, LLC sells through dealerships across the United States and Canada. End user demand is seasonal from December through July, so “early order” incentives to the dealers allow spreading of demand throughout the year. Fabrication of the chassis is done in-house as well as the assembly process. Engines are purchased and resold as part of a boat package. Dealers are allowed to choose options of color and design upgrades. The upgrades carry a larger gross margin and are a strong contributor to overall profitability. Most dealers utilize inventory finance programs to pay for their boats. We require electronic funds payment or commitment from the inventory finance company prior to shipment leaving so the cash cycle is relatively short.
Competition
Denali Marine Group, LLC operate primarily in the mid to upper tier of the Tri-toon market. Our primary competitors are Barletta, Bennington, Harris, Manitou and Avalon. The Xcursion and Coach brands have an advantage over all of these other brands, in two (2) areas. The chassis has a 100-point clip system for the three (3) toons under the deck. This allows an owner to change out a single toon within four (4) hours if they run aground or have another type of accident that causes damage. The earlier mentioned brands either require cutting to damaged toon loose then welding it to the deck or force the customer to replace the deck completely. Also, the Xcursion and Coach brands have a much superior wiring concept with full wire harness construction from the helm to the engine and all accessories. When selling our Xcursion and Coach brands we instruct the dealer to leave the helm door open so a perspective customer can see inside the helm and notice the clean and well-organized control center of the boat.
Vision
Denali Marine Group is poised to disrupt the Tri-toon market and take share away from the larger manufacturers. We can demand a premium price due to the perceived value of the integrated wiring, upscale furniture kits, sleek appearance and our Ten (10) Year Warranty, bow to stern as well as our, soon to launch all-electric power Tri-toon that produces 250 horsepower equivalent performance. The quite and smooth ride of our prototype all electric boat will revolutionize recreational boating. The vision of this company is to continuously innovate our product to stay ahead of the competition and grow substantial value to our investors.
Traction
The manufacturing operation began in 2019 from ground zero. We have now standardized most processes and improved productivity dramatically. We have also produced five (5) prototype “5- Series” to introduce the new upscale furniture upholstery and redesigned exterior of the boat. We have also produced one (1) prototype all-electric high-performance boat that will be conducting final water test in September and October of 2023. We have developed a network of forty (40) dealers and are expanding into geographical gaps in the lower forty-eight (48) states and in Canada.
Funding Ask
Funding for the full 5-Series launch (inventory $750,000, Marketing $100,000)
Funding for the All-electric Series Launch (inventory $1,120,000 Marketing $180,000, Engineering Development $140,000, Prototype Production [3 boats] $175,000).
Automation Capital Spending (Equipment $575,000: Infrastructure $100,000); Working Capital (Cash $1,800,000, Payables $970,000, Inventory $350,000).
Total funding ask is, anything that is fitting ALONG with guidance.
Projections
We have a projected base of 250 units in our 1-Series and 3-Series boats resulting in $13,125,000 in revenue. In addition to that, we expect to produce and sell 100 5-Series boats in model year 2024 resulting in $5,990,000 in revenue and 200 5-Series boats in model year 2025 resulting in $12,579,000 in revenue. We also expect to produce and sell 20 All-Electric boats in model year 2024 resulting in $1,722,000 and 250 All-Electric boats in model year 2025 resulting in $21,525,000 in revenue.
Closing
Denali Marine Group, LLC is a profitable and established business that is poised to launch market disrupting lines of Tri-toon boats. The quality of our boats is unmatched. The potential investor returns will be large with charged up marketing and the capital to make investments for productivity and continued innovation.