Brunswick Corp. will continue expansion into adjacent markets and keep growing its parts and accessories business in the coming three years, starting with its patented aluminum alloy called Mercalloy.
“We already do supply a number of industries [with Mercalloy] … and we just won a casting contract with an auto company,” Mercury president John Pfeiffer told investors and analysts during a meeting in New York on Tuesday during a presentation outlining the company’s three-year plan. “We won a contract where we’ll be a caster for an automobile component. I can’t give you any more than that.”
The company is working to reduce the cyclical nature of the boating industry by continuing to build out its P&A business, announcing on Monday the acquisition of Garelick Manufacturing Co., a maker of seats, table hardware and other items.
“This really starts changing the cyclicality of the business,” Brunswick COO Mark Schwabero said, talking about revenue from the growing P&A part of the business. “We’re well on our way to our $350 million target by 2018.”
Brunswick is a 170-year-old company and has been listed on the New York Stock Exchange for 90 years. That was a point current Brunswick CEO Dustan E. McCoy reiterated as he prepared to hand the company’s reins to Schwabero.
“We’re the 40th-oldest company listed on the New York Stock Exchange,” McCoy said during the 3-1/2-hour presentation to investors and analysts. “You don’t last this long without being very good at adaptation, change and knowing how to win.”
“We laughingly say our goal is to become boring,” McCoy said, “but next month I’ll have been doing this a decade and it’s time for me to move on. The succession plan has been very process- and goal-oriented.”
Schwabero, who is taking over for McCoy in the first quarter of 2016, delivered most of the three-hour presentation, which was followed by a half hour of questions from analysts. McCoy noted that this was his last presentation, as his position winds down in the next quarter.
Schwabero helped lead the Mercury component of the business to become the most profitable piece during and leading out of the recent recession, McCoy told investors.
The company is projecting that revenue will grow between 7 and 9 percent through 2018 and that margins will increase between 12 and 12.5 percent. That would result in target earnings of $4.35 to $4.75 a share in 2018.
Earnings per share were projected to be at $2.87 for fiscal 2015.
Mercury president John Pfeiffer, freshwater boat group president Jeff Kinsey, recreational boat group president Tim Scheik and Boston Whaler president Huw Bower detailed their plans through 2018, focusing largely on continuing to aggressively bring new products to market, maximize efficiencies and increase margins.