Delaware | 001-01043 | 36-0848180 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
26125 N. Riverwoods Blvd., Suite 500 Mettawa, Illinois | 60045-3420 | |
(Address of Principal Executive Offices) | (Zip Code) |
Exhibit No. | Description of Exhibit |
99.1 |
BRUNSWICK CORPORATION | |||
Dated: April 26, 2018 | By: | /S/ DANIEL J. TANNER | |
Daniel J. Tanner | |||
Vice President and Controller | |||
Exhibit No. | Description of Exhibit | |
99.1 | News Release, dated April 26, 2018, of Brunswick Corporation, announcing its first quarter 2018 earnings. |
Brunswick Corporation 26125 N. Riverwoods Blvd., Suite 500, Mettawa, IL 60045 | |
Telephone 847.735.4700 Facsimile 847.735.4750 |
Release: | IMMEDIATE | |
Contact: | Ryan Gwillim | |
Vice President - Investor Relations | ||
Phone: | 847-735-4926 | |
Contact: | Daniel Kubera | |
Director - Media Relations and Corporate Communications | ||
Phone: | 847-735-4617 | |
Email: | daniel.kubera@brunswick.com |
• | Consolidated net sales increased 7 percent versus first quarter 2017. Net sales increased 9 percent for the Marine Engine segment and 7 percent for the Boat segment. |
• | On a GAAP basis, operating earnings increased by 12 percent. Adjusted operating earnings were up 6 percent versus the prior period. |
• | On a GAAP basis, diluted EPS of $0.91 increased by 12 percent compared to the prior year. Diluted EPS, as adjusted, was $1.01, up 15 percent versus first quarter 2017. |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Three Months Ended | ||||||||||
March 31, 2018 | April 1, 2017 | % Change | ||||||||
Net sales | $ | 1,155.4 | $ | 1,082.1 | 7 | % | ||||
Cost of sales | 847.6 | 787.8 | 8 | % | ||||||
Selling, general and administrative expense | 155.5 | 148.1 | 5 | % | ||||||
Research and development expense | 35.7 | 34.5 | 3 | % | ||||||
Restructuring, exit, integration and impairment charges | 1.2 | 8.3 | -86 | % | ||||||
Operating earnings | 115.4 | 103.4 | 12 | % | ||||||
Equity earnings | 1.0 | 2.3 | -57 | % | ||||||
Other income (expense), net | 0.1 | (1.3 | ) | NM | ||||||
Earnings before interest and income taxes | 116.5 | 104.4 | 12 | % | ||||||
Interest expense | (6.9 | ) | (6.5 | ) | 6 | % | ||||
Interest income | 0.7 | 0.5 | 40 | % | ||||||
Earnings before income taxes | 110.3 | 98.4 | 12 | % | ||||||
Income tax provision | 29.8 | 24.2 | 23 | % | ||||||
Net earnings from continuing operations | 80.5 | 74.2 | 8 | % | ||||||
Loss from discontinued operations, net of tax | (7.6 | ) | (9.3 | ) | -18 | % | ||||
Net earnings | $ | 72.9 | $ | 64.9 | 12 | % | ||||
Earnings (loss) per common share: | ||||||||||
Basic | ||||||||||
Earnings from continuing operations | $ | 0.92 | $ | 0.82 | ||||||
Loss from discontinued operations | (0.09 | ) | (0.10 | ) | ||||||
Net earnings | $ | 0.83 | $ | 0.72 | 15 | % | ||||
Diluted | ||||||||||
Earnings from continuing operations | $ | 0.91 | $ | 0.81 | ||||||
Loss from discontinued operations | (0.09 | ) | (0.10 | ) | ||||||
Net earnings | $ | 0.82 | $ | 0.71 | 15 | % | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 88.1 | 90.1 | ||||||||
Diluted earnings per common share | 88.8 | 91.1 | ||||||||
Effective tax rate from continuing operations | 27.0 | % | 24.6 | % | ||||||
Reconciliations | ||||||||||
Continuing Operations: | ||||||||||
Operating earnings | $ | 115.4 | $ | 103.4 | 12 | % | ||||
Restructuring, exit, integration and impairment charges | 1.2 | 8.3 | -86 | % | ||||||
Separation costs | 1.7 | — | ||||||||
Adjusted operating earnings | $ | 118.3 | $ | 111.7 | 6 | % | ||||
Earnings before income taxes | $ | 110.3 | $ | 98.4 | 12 | % | ||||
Restructuring, exit, integration and impairment charges | 1.2 | 8.3 | NM | |||||||
Separation costs | 1.7 | — | ||||||||
Adjusted pretax earnings | $ | 113.2 | $ | 106.7 | 6 | % | ||||
Earnings (loss) per common share: | ||||||||||
Earnings from continuing operations | $ | 0.91 | $ | 0.81 | ||||||
Restructuring, exit, integration and impairment charges | 0.01 | 0.07 | ||||||||
Separation costs | 0.01 | — | ||||||||
Special tax items | 0.08 | (0.00 | ) | |||||||
Diluted earnings from continuing operations, as adjusted | $ | 1.01 | $ | 0.88 | 15 | % | ||||
NM = not meaningful |
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Segment Information - Continuing Operations | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) (1) | Operating Margin | |||||||||||||||||||||||||
Mar 31, 2018 | Apr 1, 2017 | % Change | Mar 31, 2018 | Apr 1, 2017 | % Change | Mar 31, 2018 | Apr 1, 2017 | ||||||||||||||||||||
Marine Engine | $ | 687.1 | $ | 631.8 | 9 | % | $ | 95.7 | $ | 87.7 | 9 | % | 13.9 | % | 13.9 | % | |||||||||||
Boat | 304.0 | 284.9 | 7 | % | 24.7 | 16.2 | 52 | % | 8.1 | % | 5.7 | % | |||||||||||||||
Marine eliminations | (80.1 | ) | (70.2 | ) | 14 | % | — | — | |||||||||||||||||||
Total Marine | 911.0 | 846.5 | 8 | % | 120.4 | 103.9 | 16 | % | 13.2 | % | 12.3 | % | |||||||||||||||
Fitness | 244.4 | 235.6 | 4 | % | 11.0 | 18.3 | -40 | % | 4.5 | % | 7.8 | % | |||||||||||||||
Corporate/Other | — | — | (16.0 | ) | (18.8 | ) | 15 | % | |||||||||||||||||||
Total | $ | 1,155.4 | $ | 1,082.1 | 7 | % | $ | 115.4 | $ | 103.4 | 12 | % | 10.0 | % | 9.6 | % | |||||||||||
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Segment Information - Continuing Operations, As Adjusted | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) (1) | Operating Margin | |||||||||||||||||||||||||
Mar 31, 2018 | Apr 1, 2017 | % Change | Mar 31, 2018 | Apr 1, 2017 | % Change | Mar 31, 2018 | Apr 1, 2017 | ||||||||||||||||||||
Marine Engine | $ | 687.1 | $ | 631.8 | 9 | % | $ | 95.7 | $ | 87.7 | 9 | % | 13.9 | % | 13.9 | % | |||||||||||
Boat | 304.0 | 284.9 | 7 | % | 24.7 | 19.7 | 25 | % | 8.1 | % | 6.9 | % | |||||||||||||||
Marine eliminations | (80.1 | ) | (70.2 | ) | 14 | % | — | — | |||||||||||||||||||
Total Marine | 911.0 | 846.5 | 8 | % | 120.4 | 107.4 | 12 | % | 13.2 | % | 12.7 | % | |||||||||||||||
Fitness | 244.4 | 235.6 | 4 | % | 12.2 | 20.7 | -41 | % | 5.0 | % | 8.8 | % | |||||||||||||||
Corporate/Other | — | — | (14.3 | ) | (16.4 | ) | 13 | % | |||||||||||||||||||
Total | $ | 1,155.4 | $ | 1,082.1 | 7 | % | $ | 118.3 | $ | 111.7 | 6 | % | 10.2 | % | 10.3 | % | |||||||||||
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Disaggregated Revenue - Continuing Operations | |||||||||||||||
Three Months Ended | |||||||||||||||
March 31, 2018 | |||||||||||||||
Marine Engine | Boat | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 474.6 | $ | 217.4 | $ | 121.6 | $ | 813.6 | |||||||
Europe | 98.3 | 34.6 | 53.4 | 186.3 | |||||||||||
Asia-Pacific | 51.2 | 4.8 | 42.1 | 98.1 | |||||||||||
Canada | 28.9 | 44.3 | 7.1 | 80.3 | |||||||||||
Rest-of-World | 34.1 | 2.9 | 20.2 | 57.2 | |||||||||||
Marine eliminations | (80.1 | ) | — | — | (80.1 | ) | |||||||||
Total | $ | 607.0 | $ | 304.0 | $ | 244.4 | $ | 1,155.4 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 378.9 | $ | — | $ | — | $ | 378.9 | |||||||
Parts & Accessories | 308.2 | — | — | 308.2 | |||||||||||
Aluminum Freshwater Boats | — | 162.5 | — | 162.5 | |||||||||||
Fiberglass Freshwater Boats | — | 55.8 | — | 55.8 | |||||||||||
Fiberglass Saltwater Boats | — | 85.7 | — | 85.7 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 132.3 | 132.3 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 90.9 | 90.9 | |||||||||||
Consumer Fitness Equipment | — | — | 21.2 | 21.2 | |||||||||||
Marine eliminations | (80.1 | ) | — | — | (80.1 | ) | |||||||||
Total | $ | 607.0 | $ | 304.0 | $ | 244.4 | $ | 1,155.4 |
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Disaggregated Revenue - Continuing Operations | |||||||||||||||
Three Months Ended | |||||||||||||||
April 1, 2017 | |||||||||||||||
Marine Engine | Boat | Fitness | Total | ||||||||||||
Geographic Markets | |||||||||||||||
United States | $ | 438.5 | $ | 209.0 | $ | 128.2 | $ | 775.7 | |||||||
Europe | 84.4 | 28.5 | 41.0 | 153.9 | |||||||||||
Asia Pacific | 49.5 | 3.1 | 36.4 | 89.0 | |||||||||||
Canada | 28.6 | 37.1 | 5.7 | 71.4 | |||||||||||
Rest-of-World | 30.8 | 7.2 | 24.3 | 62.3 | |||||||||||
Marine eliminations | (70.2 | ) | — | — | (70.2 | ) | |||||||||
Total | $ | 561.6 | $ | 284.9 | $ | 235.6 | $ | 1,082.1 | |||||||
Major Product Lines | |||||||||||||||
Propulsion | $ | 341.4 | $ | — | $ | — | $ | 341.4 | |||||||
Parts & Accessories | 290.4 | — | — | 290.4 | |||||||||||
Aluminum Freshwater Boats | — | 152.9 | — | 152.9 | |||||||||||
Fiberglass Freshwater Boats | — | 46.6 | — | 46.6 | |||||||||||
Fiberglass Saltwater Boats | — | 85.4 | — | 85.4 | |||||||||||
Commercial Cardio Fitness Equipment | — | — | 136.5 | 136.5 | |||||||||||
Commercial Strength Fitness Equipment | — | — | 77.9 | 77.9 | |||||||||||
Consumer Fitness Equipment | — | — | 21.2 | 21.2 | |||||||||||
Marine eliminations | (70.2 | ) | — | — | (70.2 | ) | |||||||||
Total | $ | 561.6 | $ | 284.9 | $ | 235.6 | $ | 1,082.1 |
Brunswick Corporation Comparative Condensed Consolidated Balance Sheets (in millions) (unaudited) | |||||||||||
March 31, 2018 | December 31, 2017 | April 1, 2017 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents, at cost, which approximates fair value | $ | 284.0 | $ | 448.8 | $ | 273.3 | |||||
Restricted cash | 9.4 | 9.4 | 11.2 | ||||||||
Short-term investments in marketable securities | 0.8 | 0.8 | 0.7 | ||||||||
Total cash and short-term investments in marketable securities | 294.2 | 459.0 | 285.2 | ||||||||
Accounts and notes receivable, net | 617.5 | 480.2 | 516.7 | ||||||||
Inventories | |||||||||||
Finished goods | 550.8 | 506.9 | 523.0 | ||||||||
Work-in-process | 98.6 | 96.8 | 80.5 | ||||||||
Raw materials | 180.3 | 161.9 | 143.9 | ||||||||
Net inventories | 829.7 | 765.6 | 747.4 | ||||||||
Prepaid expenses and other | 40.4 | 73.1 | 36.4 | ||||||||
Current assets held for sale | 80.9 | 68.8 | 85.3 | ||||||||
Current assets | 1,862.7 | 1,846.7 | 1,671.0 | ||||||||
Net property | 673.1 | 659.5 | 583.3 | ||||||||
Other assets | |||||||||||
Goodwill | 428.3 | 425.3 | 416.0 | ||||||||
Other intangibles, net | 143.3 | 144.4 | 158.6 | ||||||||
Equity investments | 29.5 | 25.0 | 26.6 | ||||||||
Deferred income tax asset | 171.0 | 165.6 | 297.6 | ||||||||
Other long-term assets | 47.0 | 45.1 | 46.1 | ||||||||
Long-term assets held for sale | 49.7 | 46.6 | 74.7 | ||||||||
Other assets | 868.8 | 852.0 | 1,019.6 | ||||||||
Total assets | $ | 3,404.6 | $ | 3,358.2 | $ | 3,273.9 | |||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities | |||||||||||
Current maturities of long-term debt | $ | 5.1 | $ | 5.6 | $ | 4.7 | |||||
Accounts payable | 419.7 | 409.7 | 390.3 | ||||||||
Accrued expenses | 583.6 | 563.6 | 498.4 | ||||||||
Current liabilities held for sale | 68.0 | 56.2 | 63.1 | ||||||||
Current liabilities | 1,076.4 | 1,035.1 | 956.5 | ||||||||
Debt | 428.9 | 431.8 | 435.4 | ||||||||
Other long-term liabilities | 415.7 | 405.7 | 404.2 | ||||||||
Long-term liabilities held for sale | 2.8 | 2.7 | 4.2 | ||||||||
Shareholders’ equity | 1,480.8 | 1,482.9 | 1,473.6 | ||||||||
Total liabilities and shareholders’ equity | $ | 3,404.6 | $ | 3,358.2 | $ | 3,273.9 | |||||
Supplemental Information | |||||||||||
Debt-to-capitalization rate | 22.7 | % | 22.8 | % | 23.0 | % |
Brunswick Corporation Comparative Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | |||||||
Three Months Ended | |||||||
March 31, 2018 | April 1, 2017 | ||||||
Cash flows from operating activities | |||||||
Net earnings | $ | 72.9 | $ | 64.9 | |||
Less: loss from discontinued operations, net of tax | (7.6 | ) | (9.3 | ) | |||
Net earnings from continuing operations | 80.5 | 74.2 | |||||
Depreciation and amortization | 27.8 | 23.6 | |||||
Stock compensation expense | 1.9 | 4.0 | |||||
Pension expense, net of (funding) | 0.9 | (33.6 | ) | ||||
Deferred income taxes | 20.5 | 13.3 | |||||
Changes in certain current assets and current liabilities | (210.2 | ) | (146.6 | ) | |||
Long-term extended warranty contracts and other deferred revenue | 2.6 | 0.7 | |||||
Income taxes | 34.5 | 2.6 | |||||
Other, net | (1.6 | ) | (4.5 | ) | |||
Net cash used for operating activities of continuing operations | (43.1 | ) | (66.3 | ) | |||
Net cash used for operating activities of discontinued operations | (24.0 | ) | (20.3 | ) | |||
Net cash used for operating activities | (67.1 | ) | (86.6 | ) | |||
Cash flows from investing activities | |||||||
Capital expenditures | (34.5 | ) | (56.6 | ) | |||
Sales or maturities of marketable securities | — | 35.0 | |||||
Investments | (4.8 | ) | (3.6 | ) | |||
Proceeds from the sale of property, plant and equipment | 0.1 | 7.6 | |||||
Other, net | (0.2 | ) | (0.5 | ) | |||
Net cash used for investing activities of continuing operations | (39.4 | ) | (18.1 | ) | |||
Net cash used for investing activities of discontinued operations | (2.6 | ) | (4.2 | ) | |||
Net cash used for investing activities | (42.0 | ) | (22.3 | ) | |||
Cash flows from financing activities | |||||||
Payments of long-term debt including current maturities | (0.1 | ) | (0.1 | ) | |||
Common stock repurchases | (35.0 | ) | (20.0 | ) | |||
Cash dividends paid | (16.6 | ) | (14.8 | ) | |||
Proceeds from share-based compensation activity | 1.0 | 3.2 | |||||
Tax withholding associated with shares issued for share-based compensation | (9.3 | ) | (11.4 | ) | |||
Net cash used for financing activities of continuing operations | (60.0 | ) | (43.1 | ) | |||
Net cash used for financing activities of discontinued operations | — | (0.1 | ) | ||||
Net cash used for financing activities | (60.0 | ) | (43.2 | ) | |||
Effect of exchange rate changes | 4.3 | 3.0 | |||||
Net decrease in Cash and cash equivalents and Restricted cash | (164.8 | ) | (149.1 | ) | |||
Cash and cash equivalents and Restricted cash at beginning of period | 458.2 | 433.6 | |||||
Cash and cash equivalents and Restricted cash at end of period | 293.4 | 284.5 | |||||
Less: Restricted cash | 9.4 | 11.2 | |||||
Cash and cash equivalents at end of period | $ | 284.0 | $ | 273.3 | |||
Reconciliation | |||||||
Free Cash Flow | |||||||
Net cash used for operating activities of continuing operations | $ | (43.1 | ) | $ | (66.3 | ) | |
Net cash provided by (used for): | |||||||
Capital expenditures | (34.5 | ) | (56.6 | ) | |||
Proceeds from the sale of property, plant and equipment | 0.1 | 7.6 | |||||
Effect of exchange rate changes | 4.3 | 3.0 | |||||
Total free cash flow | $ | (73.2 | ) | $ | (112.3 | ) |
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