Brunswick Corporation

May 1, 2018

On Thursday, April 26, 2018, Brunswick Corporation (NYSE: BC) reported their results for the first quarter of 2018:

• 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

• 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.

“Our first quarter performance was an excellent start to what we believe will be another year of successful execution of our strategy and creation of shareholder value,” said Brunswick Chairman and Chief Executive Officer Mark Schwabero. “Our marine businesses continue to benefit from strong demand for outboard boats and engines, successful new products, and our strategy to grow the parts and accessories businesses. As a result, our marine businesses had revenue growth of 8 percent in the quarter, with a very strong increase in operating earnings versus first quarter 2017.

“At this early point in the marine season, our current outlook on the global marine market remains in line with our initial expectations. While unfavorable weather
conditions in certain markets, including the Northeast and Midwest regions of the well as Europe, have contributed to a slightly slower start to boating activity and the marine retail selling season, we remain confident in our view of the industry for 2018,”Schwabero continued.

“We continue to focus on product leadership as evidenced by Mercury’s launch of the175-225 horsepower V6 outboard engines, the first in a series of major outboard engine launches planned for 2018. These products, which will begin shipping in the second quarter, along with other award-winning, new products within our other marine categories, respond to customers’ desire to migrate to products with enhanced features, resulting in overall business results that exceed the market,” Schwabero continued.

Discontinued Operations 

On December 5, 2017, Brunswick announced its intention to sell its Sea Ray businesses. Starting with the fourth quarter of 2017, the historical and future results of these businesses are now reported as discontinued operations. Therefore, for all periods presented in this release, all figures and outlook statements incorporate this change and reflect continuing operations only, unless otherwise noted.


The Marine Engine segment, which manufactures and distributes marine propulsion systems and related parts and accessories, reported net sales of $687.1 million in the first quarter of 2018, up 9 percent from $631.8 million in the first quarter of 2017.

International sales, which represented 31 percent of total segment sales in the quarter, were up 10 percent compared to the prior year period. For the quarter, the Marine Engine segment reported operating earnings of $95.7 million. This compares with operating earnings of $87.7 million in the first quarter of 2017.

Sales increases in the quarter were driven by strong growth in propulsion, led by increases in outboard engines, and solid growth in the parts and accessories businesses. The increase in operating earnings in the first quarter was primarily due to benefits from higher net sales and favorable movements in foreign exchange rates, which were partially offset by the unfavorable impact from planned spending increases stemming from new product introductions, capacity expansion, and product development.

Boat Segment

The Boat segment, which manufactures and distributes recreational boats, reported net sales of $304.0 million for the first quarter of 2018, a solid increase from $284.9 million in the first quarter of 2017. International sales, which represented 28 percent of total segment sales in the quarter, increased by 14 percent compared to the prior year period. For the first quarter of 2018, the Boat segment reported operating earnings of $24.7 million. This compares with operating earnings of $16.2 million in the first quarter of 2017.

The Boat segment’s revenue reflected strong growth in the fiberglass freshwater boat businesses, comprised of our Bayliner brand along with our European brands Brunswick Corporation Quicksilver and Uttern, and solid growth in the aluminum freshwater boat businesses.

Revenue for the fiberglass saltwater boat business was comparable to a very strong first quarter of 2017. The increase in segment operating earnings was primarily the implementation of the new revenue recognition standard.

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