Brunswick Corp. reported 2016 net sales of $4.5 billion, up 10 percent from $4.1 billion the previous year, attributing the growth to solid performance in aluminum boats, outboard engines and fiberglass sterndrive/inboard boats.
The company reported net earnings of $274.4 million, or $2.98 a diluted share, for the year, compared with $227.4 million, or $2.41 a share, in 2015.
“Our results in 2016 represent the seventh consecutive year of strong improvements in operating performance,” Brunswick chairman and CEO Mark Schwabero said in a statement. “These outstanding results reflect the continued execution of our business strategy by our global workforce.”
On a GAAP basis, diluted earnings per share of $2.98 increased 24 percent from 2015. Diluted earnings per share, as adjusted, of $3.48 increased 19 percent for the year.
Net cash from operations for the year was $426 million and free cash flow was $234 million, both up from the prior year.
“The U.S. marine market exhibited solid fundamentals and growth, which are supported by stable boating participation, favorable replacement-cycle dynamics and innovative products being introduced throughout the marketplace,” Schwabero said.
“Overall, international marine markets were challenging, including weak demand in certain markets, such as Latin America, the Middle East and Africa, as well as Canada. Our product successes in both our engine and boat segments have enabled continued market-share gains and mix benefits.”
For the fourth quarter of 2016, Brunswick reported net sales of $1.1 billion, up from $986.1 million a year earlier.
The company also reported operating earnings of $28.6 million for the quarter, compared with an operating loss of $27 million a year earlier.
For the quarter, Brunswick reported net earnings of $17.8 million, or 19 cents a diluted share, compared with a net loss of $9 million, or 10 cents a share, in the 2015 quarter.
The marine engine segment reported net sales of $500.2 million for the quarter, up 5 percent from $474.7 million the previous year.
International sales, which represented 37 percent of total segment sales for the quarter, were up 4 percent from the prior year.
On a constant-currency basis, international sales were up 3 percent. For the quarter, the segment reported operating earnings of $51.2 million, compared with $41.9 million in 2015.
The sales increases were attributed to growth in the parts and accessories businesses, which included revenue from acquisitions in 2015 and 2016, along with slight gains in the sterndrive and outboard-engine businesses.
The boat segment reported net sales of $358 million for the quarter, a 7 percent increase from $336 million in the 2015 quarter.
International sales, which represented 25 percent of total segment sales for the quarter, fell 2 percent during the period. On a constant-currency basis, international sales were down 3 percent.
The boat segment reported operating earnings of $14.9 million, compared with $2.6 million in 2015.
“The segment's increase in revenue reflected strong growth in fiberglass outboard and sterndrive/inboard boats, as well as increases in aluminum boats,” the company said. “Operating earnings benefited from higher sales, which included continued market share gains and a favorable change in product mix.”
The company’s outlook is consistent with its three-year plan, Schwabero said.
“We expect our marine businesses' top-line performance will benefit from the continuation of solid growth in the U.S. and Europe and improving market conditions in certain international markets, along with the success of new products,” he said.
“For the full year, we anticipate improvement in both gross margins and operating margins, as we plan to continue to benefit from volume leverage, cost reductions related to efficiency initiatives and modest positive product mix factors,” Schwabero said.
“Operating expenses are estimated to increase in 2017 as we continue to fund incremental investments to support growth; however, on a percentage-of-sales basis, [they] are expected to be at slightly lower levels than 2016. Our guidance for 2017 reflects a diluted EPS, as adjusted, range of $3.90 to $4.05. Finally, for the full year 2017, we expect to generate free cash flow in excess of $250 million.”
Read about the company’s conference call today with investors and analysts in Friday’s Trade Only Today.