Brunswick Corp. reported a 9 percent increase in net sales for the fourth quarter of 2013 and a 5 percent rise in overall annual sales versus 2012, which was at the high end of the company’s growth estimates for the year.
For the quarter, the marine engine group reported a 5 percent increase in sales — driven by outboard sales and offset by soft sterndrive sales — and a 16 percent increase in boat sales. The segment reported an operating loss of $21.9 million for the fourth quarter, including restructuring charges of $5.8 million.
That compares with an operating loss of $33.4 million in the fourth quarter of 2012, including restructuring charges of $8.9 million.
“In the fiberglass sterndrive/inboard boat category, which also affects sterndrive/inboard engine production, we are currently planning for a modestly declining market, with stability in large boats,” Brunswick chairman and CEO Dustan “Dusty” McCoy said in a statement.
For 2013, the company’s 26.1 percent increase in gross margin — reflecting an increase of 70 basis points from 2012 — was the highest level since 2000.
The company reported net earnings for the year of $775.2 million, or $8.26 a diluted share, compared with $147.4 million, or $1.59 a diluted share, in 2012.
A 5 percent annual increase in operating expenses was the result of research and development, as well as growth initiatives.
“Our results in 2013 represent the fourth consecutive year of strong improvements in earnings,” McCoy said. “Operating earnings, pretax earnings and diluted earnings per common share, all on an as-adjusted basis, increased by 12 percent, 27 percent and 31 percent, respectively, for the year. Sales increased by 5 percent, which is at the high end of our initial growth target for the year.”
For the fiscal year that ended Dec. 31, the company reported net sales of $3.89 billion, compared with $3.72 billion in 2012. Operating earnings were $304.2 million, which included $21.4 million of restructuring, exit and impairment charges. In 2012 Brunswick reported operating earnings of $264.1 million, which included $25.8 million of restructuring, exit and impairment charges.
The fourth quarter
For the fourth quarter, the company reported net sales of $901.5 million, up from $829.8 million a year earlier, and operating earnings of $14 million, which included $8.7 million of restructuring, exit and impairment charges. In the fourth quarter of 2012 Brunswick had operating earnings of $7 million, which included $10.5 million of restructuring, exit and impairment charges.
For the fourth quarter of 2013, Brunswick reported net earnings of $583.6 million, or $6.18 a diluted share, compared with a net loss from continuing operations of $16.1 million, or 18 cents a diluted share, for the fourth quarter of 2012.
The Mercury Marine Group reported net sales of $423.5 million in the fourth quarter, up 5 percent from $404.4 million in the same quarter in 2012.
Sales increases in the quarter were led by the segment’s outboard engines and parts and accessories businesses, partially offset by declines in sales of sterndrive engines.
International sales, which represented 40 percent of total segment sales in the quarter, decreased by 4 percent.
For the quarter, the Marine Engine segment reported operating earnings of $18.1 million. This compares with operating earnings of $16.5 million in the fourth quarter of 2012, which included $1.2 million of restructuring charges.
The 14 brands that make up the Brunswick Boat Group reported net sales of $239.7 million in the fourth quarter, a 16 percent increase from $206.7 million in the quarter last year.
International sales, which represented 40 percent of total segment sales during the quarter, increased by 15 percent for the period.
The sales growth resulted mainly from wholesale shipment increases in the segment’s outboard boat categories and smaller fiberglass sterndrive/inboard boats and growth in South America.
The improvement in the segment’s operating loss was a result of higher sales, successful cost-reduction activities and lower restructuring charges, partially offset by an increase in investment spending to support long-term growth.