Brunswick Corp. today reported its revenue grew 9 percent during fiscal year 2017, and net sales grew 14 percent in the boat segment and 8 percent in the marine engine segment for the year.
The company announced fourth quarter and fiscal year results today. It was the first time Brunswick classified Sea Ray as “discontinued operations” after announcing the sale of the brand Dec. 5.
Operating earnings dropped 13 percent on a generally accepted accounting principles basis, and adjusted operating earnings were up 5 percent versus fiscal year 2016.
Diluted earnings per share of $2.08 decreased by $0.88 on a GAAP basis, a 30 percent drop compared to the prior year. Diluted earnings per share as adjusted were $3.89, up $0.43, or 12 percent.
“Our results in 2017 reflect the continued successful execution of our strategy by our business teams and our emphasis on creating and increasing shareholder value,” said Brunswick chairman and CEO Mark Schwabero in a statement. “Our performance represents the eighth consecutive year of adjusted EPS growth, with this record high EPS resulting from strong operating performance by our marine businesses.”
During the fourth quarter, the marine engine segment reported net sales of $564.6 million, up 13 percent from $500.2 million in the fourth quarter of 2016.
International sales, which represented 31 percent of total segment sales in the quarter, were up 6 percent, compared to the prior year period. Operating earnings were $57.5 million for the quarter, compared to $51 million in the fourth quarter of 2016.
Strong growth in the outboard and the parts and accessories businesses led to the sales increases in the quarter, the company said.
The improvement in operating earnings in the fourth quarter was primarily the result of higher net sales and favorable changes in product mix, partially offset by planned increases in growth investments in advance of new product introductions and unfavorable adjustments related primarily to product warranty and the resolution of litigation.
The boat segment reported net sales of $283.2 million for the fourth quarter of 2017, up 15 percent from $245.3 million in the fourth quarter of 2016.
International sales, which represented 27 percent of total segment sales in the quarter, increased by 14 percent, compared to the prior year period.
Operating earnings in the boat segment were $21.9 million for the quarter, compared to $13.1 million the year prior.
Sea Ray reported net sales of $103.2 million in the fourth quarter and $387.6 million for the year. The brand had adjusted operating losses of $5.9 million in the fourth quarter and $17.2 million for the year.
These amounts exclude a $36 million impairment loss recorded in the fourth quarter of 2017 in connection with the anticipated sale of the business, as well as $2.2 million and $9.9 million of other restructuring, exit, integration and impairment charges for the fourth quarter and full-year, respectively.
Brunswick said in an SEC filing on Monday that it anticipated a loss between $35 million and $40 million on the Sea Ray sale. On Tuesday, hedge fund company Owl Creek urged Brunswick to spin off its fitness segment. Owl Creek advises funds that own 2.5 million Brunswick shares, about 2.8 percent of the company’s outstanding equity.
