Skip to main content

Brunswick reports 1Q results

Brunswick Corp. today reported a small decline in net sales for the first quarter. However, there was a 1 percent increase in boat sales for the period.

For the first quarter of 2012, the company reported net sales of $974.2 million, down from $985.9 million a year earlier. The company reported operating earnings of $67.6 million for the quarter, including $200,000 of restructuring, exit and impairment charges. In the first quarter of 2011 the company had operating earnings of $67 million that included $5.3 million of restructuring, exit and impairment charges.

Brunswick reported net earnings of $39.7 million, or 43 cents a diluted share, for this year’s first quarter, compared with $27.5 million, or 30 cents a diluted share, for the first quarter of 2011.

“As anticipated, our first-quarter consolidated sales were modestly lower, due to specific factors affecting our marine engine and life fitness segments. Our first-quarter gross margin of 24.2 percent reflects an increase of 20 basis points from the prior year. Selling, general and administrative expense, combined with research and development expense, increased by 3 percent, which is inclusive of companywide investments in growth initiatives. Lower net interest expense and a reduced income tax provision during the quarter contributed to our higher reported net earnings,” chairman and CEO Dustan McCoy said in a statement.

“Our first-quarter increase in earnings per share demonstrates the continuing success of our business strategy,” he added. “Short-term financial performance continues to improve, even as we make increased investments for long-term organic growth. In addition, we are pleased to see U.S. marine industry retail demand up in the first quarter, with strong growth in the aluminum and fiberglass outboard product categories.”

Boat Segment

The boat segment is composed of the Brunswick Boat Group and includes 18 boat brands. The segment reported net sales of $306.4 million for the first quarter of 2012, an increase of 1 percent, compared with $303.5 million in the first quarter of 2011. International sales, which represented 38 percent of total segment sales in the quarter, decreased by 7 percent during the period.

For the first quarter of 2012, the boat segment reported operating earnings of $2.8 million, including a gain of $1.5 million from restructuring activities. This compares with an operating loss of $4.8 million, including restructuring charges of $1 million, in the first quarter of 2011.

Boat segment production and wholesale shipments increased during the quarter, compared with the first quarter of 2011. The increase in wholesale unit shipments was partially offset by the effect of a higher mix of smaller boat sales and the absence of sales from the Sealine brand, which was divested on Aug. 30, 2011. Higher sales and lower restructuring, exit and impairment charges had a positive effect on the segment’s improved quarterly results.

Marine Engine Segment

The marine engine segment, consisting of the Mercury Marine Group, including the marine parts and accessories businesses, reported net sales of $489.4 million in the first quarter of 2012, down 2 percent from $501.1 million in the first quarter of 2011. International sales, which represented 39 percent of total segment sales in the quarter, decreased by 7 percent.

For the quarter, the marine engine segment reported operating earnings of $47.9 million, including restructuring charges of $1.7 million. This compares with operating earnings of $57.7 million in the first quarter of 2011, which included $4.3 million of restructuring charges.

Sales were higher in the segment’s U.S. outboard and parts and accessories businesses. This growth was more than offset by global sales declines in the segment’s sterndrive engine product category.

During the quarter, Mercury’s manufacturing facilities, compared with the prior year, increased their production of outboard engines in response to market demand. Mercury produced fewer sterndrive units in the quarter, versus the prior-year quarter, as it experienced operating constraints resulting from sterndrive ramp-up issues after its recently completed plant consolidation.

In addition, the absence of a gain on the sale of a distribution facility and a favorable recovery against an insurance policy in 2011 contributed to the decrease in operating earnings in the first quarter of 2012. Partially offsetting these factors was the effect of lower variable compensation expense, successful cost reduction activities and lower restructuring charges.

“On the basis of our solid performance in the first quarter and early season improvements in the retail marine marketplace, we are increasing our 2012 earnings-per-share expectation to a range of $1.30 to $1.50 per diluted share,” McCoy added.

“Although a number of the factors that negatively affected sales and earnings in the first quarter will continue into the second, we are planning for significant sales and earnings growth in the second half of this year,” he said. “Each of our business segments will continue to concentrate their efforts on maintaining a favorable cost position and generating growth through market share gains and the execution of organic growth initiatives. In addition, our 2012 plan continues to reflect the generation of positive free cash flow, the further reduction of debt outstanding and improvements to the funded status of our pension liabilities.”

Brunswick stock opened Thursday at $24.53 a share. Its 52-week high and low are $27.28 and $13.19.



NMMA: Proposed Speed Rule an ‘Existential Threat’ to Industry

The association is calling on every marine brand, employee and boat owner to file public comment by Oct. 31 over a sweeping regulation to protect North Atlantic right whales.


Axopar and Nimbus Renew Agreement

The boatbuilders have entered an agreement whereby Nimbus Group will retain exclusive rights to sell Axopar boats on the Swedish market.


Hurricane Ian Leaves Devastation in Florida

The storm left a wide swath of destruction, heavily impacting marine interests from Tampa Bay to Marco Island.


Email Is Your Ticket to Holiday Sales

Developing an effective email campaign can bolster sales and help fill winter coffers at your dealership.


NMRA Presents Annual Awards

Edson CEO Will Keene and ComMar Sales president Tim Conroy were recognized for their contributions to the marine industry.


DEALERS: Are Interest Rates Impacting Demand?

This month’s Pulse Report survey asks dealers whether interest rate increases are causing a downturn in boat sales. Take the survey here.


EPropulsion, Mack Boring Partner with Crest

Pontoon builder Crest will use an ePropulsion Navy 3.0 Evo electric outboard motor and an E175 battery for its 2023 Current model.


Beneteau Reports Significant H122 Growth

The company reported that its revenue grew 8.6 percent and income increased by 30 percent during the first half of 2022.