Brunswick reports 4Q, year-end results

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Brunswick Corp. today reported results for the fourth quarter and full year of 2012, announcing a fourth-quarter net loss of $16.1 million.

In early January, the company said it intends to exit its Hatteras and Cabo boat businesses. Those businesses are reported as discontinued operations for all periods presented in the earnings report and the company said all figures reflect continuing operations only unless it notes otherwise.

Diluted earnings per common share, as adjusted, were $2.09 for the full year, an increase of 73 cents from 2011. On the basis of generally accepted accounting principles, earnings were $1.59 a diluted share, an increase of 61 cents from the prior year.

Net sales in 2012 increased 1 percent from 2011, the company reported. Gross margins increased 150 basis points from 2011.

Adjusted operating earnings increased by $54.9 million from the prior year. On a GAAP basis, operating earnings increased by $50.4 million. Including discontinued operations, diluted earnings per common share, as adjusted, were $1.77. On a GAAP basis, they were 54 cents a diluted share.

The company said total debt was reduced by $121 million during 2012 and is at its lowest level since 1997.

“In 2012, we successfully executed our business strategy despite challenging global economic conditions,” Brunswick CEO Dustan McCoy said in a statement. “Our results in 2012 represent the third consecutive year of strong improvements in operating earnings and net earnings. Adjusted operating earnings and diluted earnings per common share, as adjusted, increased by 23 percent and 54 percent, respectively, for the year.”

The company plans to continue its sales and earnings growth in 2013, based on a projection of continued current global market conditions, McCoy said in a statement.

“In the global marine sector, we expect to benefit in 2013 from the continuing uneven recovery in the U.S. powerboat market,” McCoy said. “We plan for our outboard boat and engine products to generate solid growth as they successfully compete in this improving market, as well as our global parts and accessories businesses, as they serve a stable population of boats in use.”

“We do, however, assume that weak market conditions will continue to challenge the large fiberglass boat category, which will affect both fiberglass boat and sterndrive engine production,” McCoy said. “Positive health and wellness trends, combined with exciting new products, have positioned our fitness business to deliver excellent results, and our bowling business should further leverage its competitive advantages in an evolving market.”

Overall the company is targeting a 3 to 5 percent revenue growth rate in 2013, McCoy said.

“We are also planning to maintain the strong gross margins achieved in 2012 while exploring opportunities to further expand these margins,” McCoy said.

Brunswick expects 2013 diluted earnings per common share — excluding restructuring, exit and impairment charges, debt extinguishment losses and special tax items — to be in the range of $2.20 to $2.45, McCoy said.

2012 full-year results

For the year that ended Dec. 31, Brunswick reported net sales of $3.72 billion, up from $3.67 billion a year earlier. For the year, operating earnings were $264.1 million, which included $25.8 million of restructuring, exit and impairment charges. In 2011 the company reported operating earnings of $213.7 million, which included $21.3 million of restructuring, exit and impairment charges.

The company reported net earnings of $147.4 million, or $1.59 a diluted share, compared with net earnings of $90.6 million, or 98 cents a diluted share, in 2011. Diluted earnings per share for 2012 included restructuring, exit and impairment charges of 28 cents, losses on the early extinguishment of debt of 18 cents and a charge of 4 cents from special tax items. Earnings per diluted share for 2011 included 24 cents of restructuring, exit and impairment charges, 21 cents of losses on the early extinguishment of debt and a benefit of 7 cents from special tax items.

Fourth-quarter highlights

• Diluted earnings per common share, as adjusted, of 2 cents, a 28-cent increase from the same period in 2011; on a GAAP basis, a net loss of 18 cents a diluted share, a 10-cent improvement from the prior-year period.

• Net sales increased 9 percent from the prior year, and gross margins increased 170 basis points from the fourth quarter of 2011.

• Adjusted operating earnings increased by $26.7 million from the prior year; on a GAAP basis, operating earnings increased by $20.4 million.

• The company reported net sales of $829.8 million, up from $761.5 million a year earlier, and reported operating earnings of $7 million, which included $10.5 million of restructuring, exit and impairment charges.

• The company reported a net loss of $16.1 million, or 18 cents a diluted share, compared with a net loss of $25.4 million, or 28 cents a diluted share, for the fourth quarter of 2011.

• In the fourth quarter of 2011, the company had an operating loss of $13.4 million, which included $4.2 million of restructuring, exit and impairment charges.

• The marine engine segment reported net sales of $404.4 million, up 12 percent from $359.6 million in the fourth quarter of 2011. International sales, which represented 44 percent of total segment sales in the quarter, increased by 5 percent. The segment reported operating earnings of $16.5 million, including restructuring charges of $1.2 million. This compares with operating earnings of $7 million in the fourth quarter of 2011, which included restructuring charges of $2.8 million.

• The boat segment reported net sales of $206.7 million, an increase of 17 percent from $177.4 million in the fourth quarter of 2011. International sales, which represented 41 percent of total segment sales in the quarter, rose 25 percent during the period.

• The boat segment’s wholesale shipments were up strongly from the prior year’s quarter. The increase reflected continued growth in demand for aluminum and U.S. outboard-powered fiberglass products, which was partially offset by an ongoing weakness in global large fiberglass inboard/sterndrive and European fiberglass outboard boat products.

• The boat segment reported an operating loss of $33.4 million, including restructuring, exit and impairment charges of $8.9 million. This compares with an operating loss of $28 million, which included a restructuring gain of $200,000, in the fourth quarter of 2011. The increase in the operating loss resulted from higher restructuring and impairment charges. The operating improvement, excluding restructuring and impairment charges, reflects higher sales, net of greater investments for long-term growth and an unfavorable change in product mix.

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Comments

One comment on “Brunswick reports 4Q, year-end results

  1. JOC COLLIGNON

    • The marine engine segment reported net sales of $404.4 million, up 12 percent from $359.6 million in the fourth quarter of 2011.

    IMAGE WHAT SALES WOULD HAVE BEEN IF WE COULD HAVE GOTTEN PRODUCT FOR THE PRERIGGED BOATS ALREADY IN STOCK!

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