Publish date:

Brunswick’s ‘pivotal’ quarter


Brunswick Corp. today reported sales of $1.16 billion for its second quarter ended June 30, 2019, up 1.3 percent compared to the same period a year ago. Net income was $77.5 million, compared to $79.0 million a year ago.

CEO David Foulkes called the quarter a “pivotal point in Brunswick’s transition to a pure-play marine company,” following the sale of its fitness business.

The company reported increased sales in its Marine Engines segment for the quarter but reported a decline in sales in its boat segment. Foulkes noted softness in Brunswick’s “value brand” boat lines and sales of outboards under 150 horsepower as well as sterndrive engines. The company forecasts retail demand for new boats across the U.S. industry to be down in “mid-single digit” percentages for 2019.

“Marine Engine sales are expected to grow between 2 and 4 percent and boat group sales are expected to decline by between 6 and 7 percent” for the year,” said Foulkes in a statement. He expects continuing headwinds in sterndrives, outboard engines 150 horsepower and below, value boat products and some Boston Whaler models.

“We are also planning to significantly lower wholesale shipments in the second-half, which is necessary to realign pipelines with demand, resulting in overall pipeline levels at year-end that are meaningfully down in overall units versus 2018 and consistent on a weeks-on-hand basis, providing a solid base entering 2020,” said Foulkes.

“Despite near-term market challenges, our longer-term outlook remains very positive and consistent with our established strategic plan," Foulkes added. "Our marine businesses remain healthy and, as a result of steady investment in new products and technology, we continue to gain market share throughout our premium product categories that significantly contribute to our earnings growth.”

Its Marine Engine segment had sales of $871.5 million in the second quarter, up 4.5 percent from the same period a year ago. Operating earnings were $164.6 million compared to $149.1 million a year ago. Its Power Products acquisition contributed about 8 percent to its growth rate, according to the statement. International sales, representing 30 percent of the segment’s revenues, were up 9 percent.

Power Products and gains in higher-horsepower outboard sales pushed sales up for the quarter, while the company reported a softness in outboard engines 150 horsepower and below and sterndrive engines.

Boat segment sales fell to $366.6 million from $394.9 million a year ago. Last year’s quarter included $19.9 million in sport yacht and yacht sales. International sales, representing 26 percent of total segment sales, were down by 17 percent. Operating earnings were $20.8 million, compared to an operating loss of $32.2 million a year ago, due to $33.5 million restructuring and exit charges as well as operating losses of $27.4 million for the sport yacht and yacht divisions.

The company also announced that it increased its share repurchase authorization to $600 million, with $330 million for the second half of this year. That would bring the year total to $400 million.

“The combination of deploying sales proceeds, reinforced by today's announcement of more aggressive share repurchases, and the decisive actions announced earlier this week and last month regarding the structural reduction of approximately $50 million in annual run-rate costs, enables us to substantially enhance our long-term earnings power under a range of potential market scenarios,” said Foulkes.

Foulkes said the guidance for 2019 as adjusted diluted EPS is in the range of $4.20 to $4.30. “In addition, considering the positive momentum created by actions taken this year, including the full-year benefits from cost measures and the execution of our capital strategy, we are maintaining our 2020 EPS target of $5.00 to $5.50, assuming steady macro-economic conditions and a retail marine market that is flat to 2019," he said.


IBEX Opens Tomorrow

The three-day trade show celebrates its 30th anniversary and return to the Tampa Convention Center in Florida after last year’s virtual event.

Ritchie Navigation Sees Year of Record Growth

The 161-year-old Pembroke, Mass.-based compass manufacturer added a sixth workday to keep up with demand.

‘A Phenomenal Success’

The Southampton International Boat Show had more than 88,000 visitors during its 10-day run, after last year’s cancellation.

TopSide Marinas Makes First Two Acquisitions

Founded in January 2020, the firm has thus far acquired Beavers Bend Marina in Oklahoma and Galveston Yacht Basin in Texas.

Two Boosts for Boating and Fishing

MBIA’s Metro Boat show show draws a crowd, and the U.S. Fish and Wildlife Service expands boating and fishing opportunities.

Norwalk Boat Show Held This Weekend

The NMMA show runs through Sunday at Norwalk Cove Marina in Norwalk, Conn.

Raritan Expands Team

Patrick McNeel joins the New Jersey-based manufacturer as a marine equipment product developer.

Industry Mourns Walter “Bing” Burns O’Meara

The longtime publisher of Lakeland Boating magazine has died at 81.