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When he worked for Honda's power train division, Chad Kovarik was set by the Japanese carmaker to help turn around the operations of troubled suppliers.
Armed with a master's degree in manufacturing engineering, Kovarik learned lean manufacturing in Japan, a process that scrutinizes every step of a process for greater efficiency. “I would go into these plants and essentially turn them around into our best suppliers,” he recalls.
Word got around in the auto industry that Kovarik had a talent for turning manufacturing operations around, and he made it his career, doing turnarounds for investors who would subsequently sell the business for as much as 10 times what they paid for it. “I got a thank you check on top of my salary,” Kovarik says.
Kovarik squirreled away enough of these thank-you checks to buy his own distressed company, Cape Coral-based boat builder Action Craft.
When Kovarik bought Action Craft in 2012, for an undisclosed sum, the recession combined with death in the family had left the company without any employees or dealers. Its manufacturing equipment was idle. “It hadn't been used for six months,” Kovarik recalls.
But despite the sad state of affairs, the company had a sterling reputation among customers since Action Craft was founded in 1981. Kovarik scoured blogs and message boards for hints of problems, reaching out to former dealers. “I couldn't find anything negative about the brand,” Kovarik marveled. “They had 20 years in the market.”
The brand had remained intact, which gave Kovarik confidence he could rescue the company and continue to sell boats like the 23-foot bay boat with a 300-horsepower engine for $80,000 or the 18-foot flats boat with a 150-horsepower engine for $50,000. “Action Craft is a premium brand,” Kovarik says, noting that some competitors sell boats for half that price.
But Action Craft boats have technology that appeals to fishermen in particular. For example, its patented Qui-Dry hull design means the boat glides quietly and doesn't slap the water and spook the fish, especially as it moves through shallow waters. In addition, the hull's flares are engineered to push waves down and out so the occupants of the boat stay dry.
With a history of good service and quality manufacturing, Kovarik built a new network of dealers starting in Florida. He personally visited each one to sell them on the new management team. “A lot of dealers went out of business,” Kovarik noted. “A lot of people were skeptical. It was basically an interview process.”
Although he declines to share financial results, Kovarik says the first two years were challenging in part because customers were still reluctant to spend and dealers didn't want to be saddled with inventory. “I expected losses and losses happened,” he says.
But by the second half of 2014, the economy improved and sales grew. Last year, Action Craft sold 45 boats and Kovarik expects to sell 65 this year and 100 in 2016. “We have a three-month backlog,” he says.
Action Craft has 12 dealers in Florida and two in the Carolinas. Kovarik recently showed his boats at the Miami International Boat Show and other industry gatherings and he's lining up dealers in Alabama, Mississippi, Louisiana and Texas. “We have interest all the way up to Maine,” he says.
Managing growth is going to be the company's challenge as sales pick up. Action Craft has two facilities in Cape Coral totaling 15,000 square feet with 13 employees. “I rehired some of the old employees,” Kovarik says.
Kovarik is looking for 20,000 square feet of contiguous space to grow the operations and would prefer to stay in Cape Coral where he lives. “We are now at the point we're limited on how many we can build at once,” he says.
Follow Jean Gruss on Twitter @JeanGruss
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