Release: | IMMEDIATE RELEASE |
Contact: |
Bruce Byots |
Vice President – Corporate and Investor Relations | |
Phone: |
847-735-4612 |
Contact: |
Daniel Kubera |
Director – Media Relations and Corporate Communications | |
Phone: |
847-735-4617 |
Email: |
daniel.kubera@brunswick.com |
· |
Total sales of $718.3 million were down 52 percent versus 2008, primarily the result of marine sales that dropped by 56 percent from year-ago levels. |
· |
A net loss of $163.7 million, or $1.85 per diluted share, which includes $0.40 per diluted share of restructuring charges and $0.05 per diluted share of non-cash benefits from special tax items. |
· |
Cash on hand at quarter’s end was $461.2 million, up from 2008 year-end balance of $317.5 million. |
· |
Pipeline reduction and inventory management strategy leads to improved dealer inventory levels and company cash flow benefits, while resulting in a negative impact on the company’s revenue and earnings. |
Brunswick Corporation |
||||||||||||
Comparative Consolidated Statements of Operations |
||||||||||||
(in millions, except per share data) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended | ||||||||||||
July 4, |
June 28, |
|||||||||||
2009 |
2008 |
% Change |
||||||||||
Net sales |
$ | 718.3 | $ | 1,485.4 | -52% | |||||||
Cost of sales |
644.3 | 1,182.0 | -45% | |||||||||
Selling, general and administrative expense |
162.6 | 205.5 | -21% | |||||||||
Research and development expense |
21.3 | 32.0 | -33% | |||||||||
Restructuring, exit and impairment charges |
35.5 | 83.1 | -57% | |||||||||
Operating loss |
(145.4 | ) | (17.2 | ) |
NM |
|||||||
Equity earnings (loss) |
(4.1 | ) | 6.3 |
NM |
||||||||
Investment sale gain |
- | 1.2 |
NM |
|||||||||
Other income (expense), net |
(0.2 | ) | 0.8 |
NM |
||||||||
Loss before interest and income taxes |
(149.7 | ) | (8.9 | ) |
NM |
|||||||
Interest expense |
(18.3 | ) | (11.4 | ) | -61% | |||||||
Interest income |
1.0 | 1.5 | -33% | |||||||||
Loss before income taxes |
(167.0 | ) | (18.8 | ) |
NM |
|||||||
Income tax benefit |
(3.3 | ) | (12.8 | ) | ||||||||
Net loss |
$ | (163.7 | ) | $ | (6.0 | ) |
NM |
|||||
Loss per common share: |
||||||||||||
Basic |
$ | (1.85 | ) | $ | (0.07 | ) | ||||||
Diluted |
$ | (1.85 | ) | $ | (0.07 | ) | ||||||
Weighted average shares used for computation of: |
||||||||||||
Basic loss per common share |
88.4 | 88.3 | ||||||||||
Diluted loss per common share |
88.4 | 88.3 | ||||||||||
Effective tax rate |
2.0% | 68.2% | ||||||||||
Supplemental Information |
||||||||||||
Diluted net loss |
$ | (1.85 | ) | $ | (0.07 | ) | ||||||
Restructuring, exit and impairment charges (1) |
0.40 | 0.59 | ||||||||||
Investment sale gain, net of tax |
- | (0.01 | ) | |||||||||
Special tax items |
(0.05 | ) | (0.03 | ) | ||||||||
Diluted net earnings (loss), as adjusted |
$ | (1.50 | ) | $ | 0.48 | |||||||
(1) The 2009 Restructuring, exit and impairment charges assume no tax benefit, while the 2008 Restructuring, exit and impairment charges include a tax benefit. |
Brunswick Corporation |
||||||||||||
Comparative Consolidated Statements of Operations |
||||||||||||
(in millions, except per share data) |
||||||||||||
(unaudited) |
||||||||||||
Six Months Ended |
||||||||||||
July 4, |
June 28, |
|||||||||||
2009 |
2008 |
% Change |
||||||||||
Net sales |
$ | 1,453.0 | $ | 2,832.2 | -49% | |||||||
Cost of sales |
1,287.8 | 2,259.2 | -43% | |||||||||
Selling, general and administrative expense |
317.8 | 408.7 | -22% | |||||||||
Research and development expense |
45.2 | 65.9 | -31% | |||||||||
Restructuring, exit and impairment charges |
75.1 | 105.3 | -29% | |||||||||
Operating loss |
(272.9 | ) | (6.9 | ) |
NM |
|||||||
Equity earnings (loss) |
(7.3 | ) | 11.1 |
NM |
||||||||
Investment sale gain |
- | 20.9 |
NM |
|||||||||
Other income (expense), net |
(1.6 | ) | 1.9 |
NM |
||||||||
Earnings (loss) before interest and income taxes |
(281.8 | ) | 27.0 |
NM |
||||||||
Interest expense |
(36.5 | ) | (22.9 | ) | -59% | |||||||
Interest income |
1.5 | 2.9 | -48% | |||||||||
Earnings (loss) before income taxes |
(316.8 | ) | 7.0 |
NM |
||||||||
Income tax (benefit) expense |
31.1 | (0.3 | ) | |||||||||
Net earnings (loss) |
$ | (347.9 | ) | $ | 7.3 |
NM |
||||||
Earnings (loss) per common share: |
||||||||||||
Basic |
$ | (3.94 | ) | $ | 0.08 | |||||||
Diluted |
$ | (3.94 | ) | $ | 0.08 | |||||||
Weighted average shares used for computation of: |
||||||||||||
Basic earnings (loss) per common share |
88.4 | 88.3 | ||||||||||
Diluted earnings (loss) per common share |
88.4 | 88.4 | ||||||||||
Effective tax rate (1) |
-9.8% | -5.0% | ||||||||||
Supplemental Information |
||||||||||||
Diluted net earnings (loss) |
$ | (3.94 | ) | $ | 0.08 | |||||||
Restructuring, exit and impairment charges (1) |
0.85 | 0.74 | ||||||||||
Investment sale gain, net of tax |
- | (0.11 | ) | |||||||||
Special tax items |
0.36 | (0.02 | ) | |||||||||
Diluted net earnings (loss), as adjusted |
$ | (2.73 | ) | $ | 0.69 | |||||||
(1) The 2009 Restructuring, exit and impairment charges assume no tax benefit, while the 2008 Restructuring, exit and impairment charges include a tax benefit. |
Brunswick Corporation |
|||||||||||||||||
Selected Financial Information |
|||||||||||||||||
(in millions) |
|||||||||||||||||
(unaudited) |
|||||||||||||||||
Segment Information (1) |
|||||||||||||||||
Three Months Ended | |||||||||||||||||
Net Sales |
Operating Earnings (Loss) (2) |
Operating Margin | |||||||||||||||
July 4, |
June 28, |
% |
July 4, |
June 28, |
% |
July 4, |
June 28, | ||||||||||
2009 |
2008 |
Change |
2009 |
2008 |
Change |
2009 |
2008 | ||||||||||
Marine Engine |
$ 415.2 |
$ 723.6 |
-43% |
$ (7.8 |
) |
$ 58.9 |
NM |
-1.9% |
8.1% | ||||||||
Boat |
138.8 |
591.7 |
-77% |
(107.9 |
) |
(42.2 |
) |
NM |
-77.7% |
-7.1% | |||||||
Marine eliminations |
(18.1 |
) |
(97.0 |
) |
- |
- |
|||||||||||
Total Marine |
535.9 |
1,218.3 |
-56% |
(115.7) |
16.7 |
NM |
-21.6% |
1.4% | |||||||||
Fitness |
105.0 |
156.9 |
-33% |
0.2 |
8.2 |
-98% |
0.2% |
5.2% | |||||||||
Bowling & Billiards |
77.4 |
110.4 |
-30% |
(5.9 |
) |
(19.8 |
) |
70% |
-7.6% |
-17.9% | |||||||
Eliminations |
- |
(0.2 |
) |
- |
- |
||||||||||||
Corp/Other |
- |
- |
(24.0 |
) |
(22.3 |
) |
-8% |
||||||||||
Total |
$ 718.3 |
$ 1,485.4 |
-52% |
$ (145.4 |
) |
$ (17.2 |
) |
NM |
-20.2% |
-1.2% | |||||||
Six Months Ended | |||||||||||||||||
Net Sales |
Operating Earnings (Loss) (3) |
Operating Margin | |||||||||||||||
July 4, |
June 28, |
% |
July 4, |
June 28, |
% |
July 4, |
June 28, | ||||||||||
2009 |
2008 |
Change |
2009 |
2008 |
Change |
2009 |
2008 | ||||||||||
Marine Engine |
$ 759.1 |
$ 1,352.2 |
-44% |
$ (58.4 |
) |
$ 92.5 |
NM |
-7.7% |
6.8% | ||||||||
Boat |
344.1 |
1,157.3 |
-70% |
(180.2 |
) |
(59.6 |
) |
NM |
-52.4% |
-5.1% | |||||||
Marine eliminations |
(51.1 |
) |
(207.2 |
) |
- |
- |
|||||||||||
Total Marine |
1,052.1 |
2,302.3 |
-54% |
(238.6 |
) |
32.9 |
NM |
-22.7% |
1.4% | ||||||||
Fitness |
223.6 |
306.1 |
-27% |
0.5 |
16.3 |
-97% |
0.2% |
5.3% | |||||||||
Bowling & Billiards |
177.3 |
224.0 |
-21% |
4.7 |
(18.9 |
) |
NM |
2.7% |
-8.4% | ||||||||
Eliminations |
- |
(0.2 |
) |
- |
- |
||||||||||||
Corp/Other |
- |
- |
(39.5 |
) |
(37.2 |
) |
-6% |
||||||||||
Total |
$ 1,453.0 |
$ 2,832.2 |
-49% |
$ (272.9 |
) |
$ (6.9 |
) |
NM |
-18.8% |
-0.2% | |||||||
(1) |
During the first quarter of 2009, the company realigned the management of its marine service, parts and accessories businesses. The Boat segment's parts and accessories businesses of Attwood, Land 'N' Sea, Benrock, Inc., Kellogg Marine, Inc. and Diversified Marine Products, L.P. are now being managed by the Marine Engine segment's service and
parts business leaders. As a result, the parts and accessories businesses operating results previously reported in the Boat segment are now being reported in the Marine Engine segment. Segment results have been restated for all periods presented to reflect the change in Brunswick’s reported segments. | ||||||||||||||||
(2) |
Operating earnings (loss) in the second quarter of 2009 includes $35.5 million of pretax restructuring, exit and impairment charges. The $35.5 million charge consists of $9.6 million in the Marine Engine segment, $17.9 million in the Boat segment, $0.2 million in the Fitness segment, $3.2 million in the Bowling & Billiards segment and $4.6
million in Corp/Other. Operating earnings (loss) in the second quarter of 2008 includes $83.1 million of pretax restructuring, exit and impairment charges. The $83.1 million charge consists of $17.6 million in the Marine Engine segment, $37.6 million in the Boat segment, $1.3 million in the Fitness segment, $19.8 million in the Bowling & Billiards segment and $6.8 million in Corp/Other. | ||||||||||||||||
(3) |
Operating earnings (loss) in the first six months of 2009 includes $75.1 million of pretax restructuring, exit and impairment charges. The $75.1 million consists of $21.3 million in the Marine Engine segment, $42.9 million in the Boat segment, $1.2 million in the Fitness segment, $4.0 million in the Bowling & Billiards segment and $5.7
million in Corp/Other. Operating earnings (loss) in the first six months of 2008 includes $105.3 million of restructuring, exit and impairment charges. The $105.3 million consists of $19.1 million in the Marine Engine segment, $51.4 million in the Boat segment, $1.3 million in the Fitness segment, $25.4 million in the Bowling & Billiards segment and $8.1 million in Corp/Other. |
Brunswick Corporation |
||||||||||||
Comparative Condensed Consolidated Balance Sheets |
||||||||||||
(in millions) |
||||||||||||
July 4, |
December 31, |
June 28, |
||||||||||
2009 |
2008 |
2008 |
||||||||||
(unaudited) |
(unaudited) |
|||||||||||
Assets |
||||||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
$ | 461.2 | $ | 317.5 | $ | 392.8 | ||||||
Accounts and notes receivables, net |
405.5 | 444.8 | 604.8 | |||||||||
Inventories |
||||||||||||
Finished goods |
299.0 | 457.7 | 471.0 | |||||||||
Work-in-process |
201.1 | 248.2 | 311.6 | |||||||||
Raw materials |
79.9 | 105.8 | 139.7 | |||||||||
Net inventories |
580.0 | 811.7 | 922.3 | |||||||||
Deferred income taxes |
16.4 | 103.2 | 242.6 | |||||||||
Prepaid expenses and other |
33.5 | 59.7 | 44.8 | |||||||||
Current assets |
1,496.6 | 1,736.9 | 2,207.3 | |||||||||
Net property |
836.6 | 917.6 | 1,001.9 | |||||||||
Other assets |
||||||||||||
Goodwill, net |
291.1 | 290.9 | 677.3 | |||||||||
Other intangibles, net |
81.5 | 86.6 | 213.1 | |||||||||
Investments |
62.2 | 75.4 | 103.1 | |||||||||
Other long-term assets |
106.4 | 116.5 | 142.4 | |||||||||
Other assets |
541.2 | 569.4 | 1,135.9 | |||||||||
Total assets |
$ | 2,874.4 | $ | 3,223.9 | $ | 4,345.1 | ||||||
Liabilities and shareholders' equity |
||||||||||||
Current liabilities |
||||||||||||
Short-term debt |
$ | 82.4 | $ | 3.2 | $ | 0.8 | ||||||
Accounts payable |
222.7 | 301.3 | 421.6 | |||||||||
Accrued expenses |
652.4 | 696.7 | 836.8 | |||||||||
Current liabilities |
957.5 | 1,001.2 | 1,259.2 | |||||||||
Long-term debt |
727.8 | 728.5 | 726.9 | |||||||||
Other long-term liabilities |
768.3 | 764.3 | 433.8 | |||||||||
Common shareholders' equity |
420.8 | 729.9 | 1,925.2 | |||||||||
Total liabilities and shareholders' equity |
$ | 2,874.4 | $ | 3,223.9 | $ | 4,345.1 | ||||||
Supplemental Information |
||||||||||||
Debt-to-capitalization rate |
65.8% | 50.1% | 27.4% |
Brunswick Corporation |
||||||||
Comparative Condensed Consolidated Statements of Cash Flows |
||||||||
(in millions) |
||||||||
(unaudited) |
||||||||
Six Months Ended |
||||||||
July 4, |
June 28, |
|||||||
2009 |
2008 |
|||||||
Cash flows from operating activities |
||||||||
Net earnings (loss) |
$ | (347.9 | ) | $ | 7.3 | |||
Depreciation and amortization |
80.6 | 90.5 | ||||||
Pension expense |
42.3 | 3.3 | ||||||
Deferred income taxes |
31.4 | (22.5 | ) | |||||
Provision for doubtful accounts |
26.9 | 13.0 | ||||||
Impairment charges |
14.4 | 52.8 | ||||||
Changes in certain current assets and current liabilities |
214.4 | (104.5 | ) | |||||
Repurchase of accounts receivable (1) |
(84.2 | ) | - | |||||
Income taxes |
78.5 | 23.7 | ||||||
Other, net |
11.7 | (1.0 | ) | |||||
Net cash provided by operating activities |
68.1 | 62.6 | ||||||
Cash flows from investing activities |
||||||||
Capital expenditures |
(13.7 | ) | (58.0 | ) | ||||
Investments |
5.4 | 13.0 | ||||||
Proceeds from investment sale |
- | 40.4 | ||||||
Proceeds from sale of property, plant and equipment |
5.4 | 3.4 | ||||||
Other, net |
(0.2 | ) | 0.2 | |||||
Net cash used for investing activities |
(3.1 | ) | (1.0 | ) | ||||
Cash flows from financing activities |
||||||||
Net issuances of short-term debt |
5.5 | 0.3 | ||||||
Net proceeds from asset-based lending facility (1) |
73.9 | - | ||||||
Payments of long-term debt including current maturities |
(0.7 | ) | (0.5 | ) | ||||
Net cash provided by (used for) financing activities |
78.7 | (0.2 | ) | |||||
Net increase in cash and cash equivalents |
143.7 | 61.4 | ||||||
Cash and cash equivalents at beginning of period |
317.5 | 331.4 | ||||||
Cash and cash equivalents at end of period |
$ | 461.2 | $ | 392.8 | ||||
Free Cash Flow |
||||||||
Net cash provided by operating activities |
$ | 68.1 | $ | 62.6 | ||||
Net cash provided by (used for): |
||||||||
Capital expenditures |
(13.7 | ) | (58.0 | ) | ||||
Proceeds from investment sale |
- | 40.4 | ||||||
Proceeds from sale of property, plant and equipment |
5.4 | 3.4 | ||||||
Other, net |
(0.2 | ) | 0.2 | |||||
Total free cash flow |
$ | 59.6 | $ | 48.6 | ||||