Premier Pontoons — Premier Marine Inc.— has emerged from Chapter 11 bankruptcy and will continue to focus on building luxury pontoons for its nationwide dealer network.
The reorganized Premier will remain a Wyoming, Minn.-based company with its current workforce in place, company officials stated in a news release Wednesday.
Premier’s exit from Chapter 11, approved Tuesday in Minnesota Bankruptcy Court, authorizes a change in ownership to a Minnesota-owned company, Premier Pontoon Holdings, LLC.
“The Premier team has worked tirelessly over the nine months to assure we continue to build high-quality pontoon boats as an industry leader,” said Rick Gallagher, Premier’s new chief executive officer.
Founders Bob and Betty Menne will continue with the company under the new ownership. Lori Melbostad will become Premier’s executive vice president.
Gallagher served as Premier Marine’s financial adviser while the company was operating in Chapter 11. The company filed for Chapter 11 on June 19, 2017. Unlike Chapter 7 and Chapter 9 bankruptcies, Chapter 11 bankruptcy gave Premier Marine a chance for a full restructure.
Premier quickly moved to establish new agreements with most of its existing vendors. The filing did not change the company’s ability to deliver orders.
Gallagher is the founder of GuideSource, a Twin Cities-based consulting practice that develops and delivers solutions for small and mid-sized businesses. GuideSource provides financial management, business strategy and operations leadership.
Gallagher served in C-level and senior management positions inside publicly-traded companies, startups, and small businesses.
Prior to founding GuideSource, Gallagher owned several other companies specializing in data management. He earned a bachelor’s degree from the University of Minnesota in Mechanical Engineering with an Industrial Engineering emphasis and a track inside Carlson School of Management.
“I worked with Lori and the team during the bankruptcy, Gallagher told Boating Industry. “The new ownership asked if it would serve as CEO, and I told them it would be a privilege to do so.”
The company’s reorganization has Premier poised to increase production levels across each of its lines, Gallagher said.
Premier Marine’s new owner is Minneapolis-based truck dealership Astleford International, one of the largest International truck dealerships in the Upper Midwest.
Astleford is a Minnesota family that’s been investing in businesses for more than 50 years, Gallagher added.
“They saw the talent inside of Premier, and the certainty of the brand,” he said. “We’ve had a lot of pent-up demand and innovation here at Premier. That’s been going on for a long time. We are excited to demonstrate what that will look like in the next 12 to 24 months.”
According to Melbostad, during the Chapter 11 process, Premier’s management team focused “a lot more” on cash availability, but kept in mind the changes the company could rapidly put into play for the coming model year.
“We just finished our 2019 model year project meeting last week, and we are good to go,” Melbostad said. “We are super excited. We will possibly launch some models in June. We’re excited about our dealer meeting coming up at the end of August.”
Late last August, Premier Marine wrapped its 2018 dealer meeting during its reorganization. The company hosted 78 dealers during a three-day open house.
At the event, the company showcased 14 new models of boats with refinements for the 2018 model year. Over 185 people attended the event and Premier Marine said it was very pleased with the ongoing commitment and support from its dealer network.
Melbostad told Boating Industry Premier Pontoon’s dealer network has been working with a lower inventory than normal during the bankruptcy process.
“Our dealers are excited to fill their coffers and get back into business as usual,” she said. “They have been amazing through this process. We’ll be looking at markets where we can grow, and take advantage of industry growth.”
According to Grand Rapids, Michigan-based Statistical Surveys Inc. (SSI), The expectation for 2018 is that pontoon sales will climb to over 50,000 units.
SSI notes that for calendar year 2017, sales of pontoon boats in the U.S. grew by 7.20 percent overall. And 2017 market data from the National Marine Manufacturers Association shows pontoon boats enjoyed a market share of 20.6 percent.
What’s even more interesting is the pontoon’s relative market share among boats powered by outboard engines. For 2017, pontoons represented nearly 32 percent of the outboard-powered market with a whopping 31.8 percent share – a figure that has been consistent across the past five years.
“Our product line plays right into the increasing horsepower per boat that’s occurring with outboard propulsion,” Melbostad said. “We’re finally on the outside of the Chapter 11 process. We are extremely excited to be moving forward.”