Brunswick shows 41 per cent jump in sales, swings to net profit
By IBI Magazine
Brunswick today reported sales of US$1.01bn for its second quarter of 2010, a 41 per cent gain over the same period a year ago. It reported net income of US$13.7m, compared to a loss of US$163.7m a year ago. "The continued successful execution of our strategic initiatives over the past several quarters was a key factor in our improved second quarter results," said Dustan E. McCoy, chairman and CEO in a statement. "Historically low marine dealer inventories as we entered the year led to improved wholesale shipments. This, combined with significant fixed-cost reductions achieved over the past two years, enabled us to report our second consecutive quarterly operating profit." McCoy added that cash increased to US$93m and net debt was down by US$120m. Its Marine Engine segment reported sales of US$579.2m, up 39 per cent from the same period a year ago. Brunswick said international sales, which represent 41 per cent of total sales, rose by 28 per cent. The division had operating earnings of US$89.2m, compared to an operating loss of US$7.8m a year ago. Higher sales included a "low-teen" increase in domestic marine service, parts and accessories businesses, which represented 28 per cent of total segment sales. Brunswick said the sterndrive engine business experienced the greatest sales growth. The Boat Segment reported sales of US$296.6m for the quarter, a 114 per cent increase over last year. International sales rose by 64 per cent. They represent 38 per cent of total segment sales. But the division reported an operating loss of US$23.5m for the quarter that included restructuring and exit charges of US$21.7m. That compares with an operating loss of US$107.9m a year ago. Brunswick announced the sale of Triton Boats today, saying that it would have a US$15m restructuring charge taken during this quarter. McCoy said conditions in 2010 have been "difficult". He added that end-market results are "mixed", both in the US and international markets. "Retail demand for our marine market products continues to be at historically record low levels, but the overall market rate of decline has eased," he said. "During the second half of 2010, we will continue to focus on liquidity and closely manage our overall cost structure. In addition, we plan to keep our production and wholesale shipment levels closely matched with retail demand and dealer stocking requirements, which will ensure the continuing health of our dealer pipeline inventories."
(29 July 2010)
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