Brunswick Corp. today reported a 7 percent full-year increase in 2015 net sales, which the company said reflected strong growth rates in fiberglass sterndrive, inboard and outboard boats, outboard engines and marine parts and accessories.
“Our results in 2015 represent the sixth consecutive year of strong improvements in operating performance,” Brunswick chairman and CEO Dustan McCoy said in a statement. “These outstanding results reflect the strong execution of our business strategy by our global workforce.”
Full-year revenue increased by 7 percent — 11 percent on a constant currency basis — McCoy said.
“Our top line reflected strong growth rates in fiberglass sterndrive/inboard and outboard boats, outboard engines and marine parts and accessories,” McCoy said. “This growth also included solid performance in fitness equipment. Solid market demand, higher average marine selling prices, benefits from acquisitions completed in 2014 and 2015 and continued market share gains drove sales growth.”
Adjusted operating earnings in 2015 increased by 18 percent, compared with the prior year, resulting in an adjusted operating margin increase of 100 basis points.
Diluted earnings per common share, as adjusted, increased 21 percent.
“This strong earnings growth was also supported by benefits from cost reductions and savings related to sourcing initiatives and a more favorable product mix, partially offset by the unfavorable effects of foreign exchange,” McCoy said.
The company reported fourth-quarter net sales of $986.1 million, up from $938.6 million in the 2014 quarter. It also reported an operating loss of $27 million, which included an $82.3 million pension settlement charge and $12.4 million of restructuring, exit and impairment charges, compared with operating earnings of $14.6 million in 2014.
Brunswick reported a net loss of $9 million for the quarter, or 10 cents a diluted share, compared with a loss of $2.3 million, or 3 cents a share, in 2014.
For the year, the company reported net sales of $4.1 billion, up from $3.8 billion in 2014.
Operating earnings were $331.7 million, which included an $82.3 million pension settlement charge and $12.4 million of restructuring, exit and impairment charges.
In 2014, the company reported operating earnings of $328.5 million, which included a $27.9 million pension settlement charge and $4.2 million of restructuring, exit and impairment charges.
For 2015, Brunswick reported net earnings of $227.4 million, or $2.41 a diluted share, compared with $194.9 million, or $2.05 a share, for 2014.
The marine engine segment reported net sales of $474.7 million in the fourth quarter, up 2 percent from $465 million in 2014.
International sales, which represented 37 percent of total segment sales during the quarter, were down 5 percent from the prior-year period.
On a constant currency basis, international sales were up 7 percent. For the quarter, the marine engine segment reported operating earnings of $41.9 million, compared with $31.6 million in the quarter last year.
Sales increases in the quarter reflected growth in the segment’s outboard engine and parts and accessories businesses, which included revenue from acquisitions completed in the second and fourth quarters of last year.
Higher revenue and cost reductions, including benefits from improved plant efficiencies, lower commodity costs and savings related to sourcing initiatives, as well as a more favorable product mix contributed to the increase in operating earnings in the 2015 fourth quarter. Partially offsetting these positive factors were the unfavorable effects of foreign exchange.
The boat segment, made up of 14 brands, reported net sales of $336 million in the fourth quarter, an increase of 14 percent from $294.3 million in the previous year’s quarter.
International sales, which represented 27 percent of total segment sales during the quarter, decreased 7 percent during the period. On a constant currency basis, international sales were up 4 percent.
The segment reported operating earnings of $2.6 million, compared with an operating loss of $4.1 million in the 2014 quarter.
The segment's increase in revenue reflected strong growth in fiberglass outboard and sterndrive/inboard boats. Operating earnings benefited from higher sales and a more favorable product mix, as well as lower commodity costs and savings related to sourcing initiatives and cost reductions.
"Our outlook for 2016 is generally consistent with our three-year strategic plan and reflects another year of outstanding earnings growth, with strong cash flow generation,” said Brunswick president and COO Mark Schwabero, who is set to succeed McCoy later this year.
Schwabero said solid growth was partially offset by the stronger U.S. dollar and weakness in some international markets.
“As a result, our plan, including the Cybex International acquisition completed on Jan. 20, 2016, reflects revenue growth rates in 2016 to be in the range of 9 to 11 percent, absent any significant changes in our global macroeconomic assumptions,” Schwabero said. “In total, acquisitions are expected to account for about 5 percent of 2016’s projected growth, reflecting the impact of completed acquisitions.”
For the year, the company anticipates slight improvements in gross margins and operating margins.
“Our guidance for 2016 reflects a diluted EPS, as adjusted, range of $3.35 to $3.50. Finally, for the full year, we expect to generate strong free cash flow in excess of $200 million,” Schwabero concluded.