Brunswick Corporation Posts 4th Quarter Results


Brunswick Corporation, Lake Forest, Illinois, has released its results for the fourth quarter and full-year of 2012.

In early January, the company announced its intention to exit its Hatteras and CABO boat businesses. As a result, Brunswick Corporation reports on the businesses as discontinued operations and report figures reflect its continuing operations only.

For 2012, the Company reported net earnings of US $147.4 million, or US $1.59 per diluted share, compared with net earnings of US $90.6 million, or US $0.98 per diluted share, for 2011.

"In 2012, we successfully executed our business strategy despite challenging global economic conditions,' explained Brunswick Chairman and Chief Executive Officer Dustan E. McCoy. "Our results in 2012 represent the third consecutive year of strong improvements in operating earnings and net earnings. Adjusted operating earnings and diluted earnings per common share, as adjusted, increased by 23 percent and 54 percent, respectively, for the year. In addition, increased earnings contributed to the continued generation of solid free cash flow. As a result, we made significant progress in improving our balance sheet by reducing debt balances by US $121 million, which contributed to a US $14 million reduction in interest expense.'

Fourth Quarter Results
For the fourth quarter of 2012, the company reported net sales of US $829.8 million, up from US $761.5 million a year earlier. For the quarter, the company reported operating earnings of US $7 million, which included US $10.5 million of restructuring, exit and impairment charges. In the fourth quarter of 2011, the Company had an operating loss of US $13.4 million, which included US $4.2 million of restructuring, exit and impairment charges.

For the fourth quarter of 2012, Brunswick reported a net loss of US $16.1 million, or US $0.18 per diluted share, compared with a net loss of US $25.4 million, or US $0.28 per diluted share, for the fourth quarter of 2011.

2012 Full-Year Results
For the year ended Dec. 31, 2012, the company reported net sales of US $3,717.6 million, up from US $3,670 million a year earlier. For the year, operating earnings were US $264.1 million, which included US $25.8 million of restructuring, exit and impairment charges. In 2011, the company reported operating earnings of US $213.7 million, which included US $21.3 million of restructuring, exit and impairment charges.

Review of Cash Flow and Balance Sheet
Cash and marketable securities totaled US $428.7 million at the end of 2012, down US $79.1 million from year-end 2011 levels. This decrease primarily reflects the impact of cash used for the retirement of debt, partially offset by US $64.1 million of positive free cash flow, including cash used by discontinued operations.

Net debt (defined as total debt, less cash and marketable securities) at the end of 2012 was US $143.1 million, a decrease of US $41.9 million from year-end 2011 levels. The decrease in net debt reflects a US $121 million reduction in debt levels, partially offset by a decrease in cash and marketable securities.

Marine Engine Segment
The marine engine segment, consisting of the Mercury Marine Group, including the marine parts and accessories businesses, reported net sales of US $404.4 million in the fourth quarter of 2012, up 12 percent from US $359.6 million in the fourth quarter of 2011. International sales, which represented 44 percent of total segment sales in the quarter, increased by five percent. For the quarter, the marine engine segment reported operating earnings of US $16.5 million, including restructuring charges of US $1.2 million. This compares with operating earnings of US $7 million in the fourth quarter of 2011, which included restructuring charges of US $2.8 million.

Boat Segment
The boat segment is comprised of the Brunswick Boat Group, and includes 16 boat brands. The boat segment reported net sales of US $206.7 million for the fourth quarter of 2012, an increase of 17 percent compared with US $177.4 million in the fourth quarter of 2011. International sales, which represented 41 percent of total segment sales in the quarter, increased by 25 percent during the period. For the fourth quarter of 2012, the Boat segment reported an operating loss of US $33.4 million, including restructuring, exit and impairment charges of US $8.9 million. This compares with an operating loss of US $28.0 million, which included a restructuring gain of US $0.2 million in the fourth quarter of 2011.

The boat segment's wholesale shipments were up strongly versus the prior year quarter. The increase in wholesale shipments reflected continued growth in demand for aluminum and US outboard-powered fibreglass products, which was partially offset by ongoing weakness in global large fibreglass inboard/sterndrive and European fibreglass outboard boat products.

Outlook
"In 2013, we are planning a continuation of the sales and earnings growth achieved by the company for the past three years,' McCoy said. "Our plans are based on global economic conditions in 2013 that are generally comparable to 2012, with weakness continuing in Europe.

"In the global marine sector, we expect to benefit in 2013 from the continuing uneven recovery in the US powerboat market. We plan for our outboard boat and engine products to generate solid growth as they successfully compete in this improving market, as well as our global parts and accessories businesses, as they serve a stable population of boats in use. We do, however, assume that weak market conditions will continue to challenge the large fibreglass boat category, which will affect both fibreglass boat and sterndrive engine production.

"We expect our 2013 diluted earnings per common share, excluding restructuring, exit and impairment charges, debt extinguishment losses and special tax items, to be in the range of $2.20 to $2.45.'

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