Brunswick sees improving boat market

LAKE FOREST, Ill. — Brunswick Corp. reported sharply higher third-quarter sales and earnings largely due to a stronger wholesale market for boats, according to a statement from the company today.

The company’s boat sales increased 21 percent during the three months ended September 30 to $404.5 million and its boat-related operating earnings totaled $8.2 million, compared with only $200,000 a year earlier.

After the first nine months of this year, Brunswick’s boat sales were up 13 percent to $1.20 billion and its boat-related operating earnings amounted to $54.6 million, compared with $14.5 million a year earlier.

“Our boat brands had a very good quarter, producing 10 percent sales growth with improvements reported by nearly all of our product lines,” said GeorgeBuckley, the New York Stock Exchange-listed company’s chairman and chief executive officer. “Sales of Bayliner runabouts and Sea Ray sport boats were especially strong. In particular, we are very encouraged by the success of our Bayliner 175, which is driving significant share gains in the runabout category.

“Incremental sales from recently acquired Land ‘N’ Sea and Attwood marine parts and accessories businesses accounted for the balance of the boat segment’s healthy sales gain,” Buckley added.

Brunswick’s total sales increased 15 percent during the July-through-September period to $1.04 billion, compared with $900 million a year earlier, and just over half of the increase was due to the company’s acquisition of aftermarket parts and accessories distributor Land ‘N’ Sea and navigation equipment supplier Navman NZ Limited.

Brunswick’s third quarter net profit increased 61-percent to $37.9 million, compared with $23.6 million a year earlier.

“Due in part to a more stable economy, the pickup in retail demand for boats that began toward the end of the second quarter continued in the third, leading to higher wholesale shipments,” said Buckley. “While wholesale shipments increased, pipeline inventories remain in very good shape and are unchanged from a year ago at 16 weeks of supply for engines and 21 weeks supply for boats.”

Boat engine sales improve

The company reported its marine engine sales increased 18 percent during the three months ended September 30 to $500.8 million, compared with $426.2 million during the same period a year earlier.

Brunswick’s marine engine segment, which includes Mercury Marine Group and Brunswick New Technologies, also reported that its operating earnings increased 18 percent during the third quarter to $60.9 million, compared with $51.7 million during the July-through-September portion of 2002.

Sales growth occurred during the third quarter largely due to acquisitions by Brunswick New Technologies and robust sales outside the United States.

“Mercury’s international sales were up sharply in Europe and Asia, reflecting higher shipments of sterndrive engines and parts and accessories as well as the benefit from the weaker U.S. dollar,” said Buckley. “On the domestic front, Mercury’s sales increased 4 percent in the quarter, driven by higher sales of sterndrive engines and an improving trend for outboard engines, which were up slightly versus the year-ago quarter.

“We also saw a rebound in sales of parts and accessories in the third quarter compared with the first half of the year when cold weather delayed the start of the boating season in the United States and P&A sales dropped 10 percent.”

After the first nine months of this year, Brunswick’s marine engine segment sales were up 10 percent to $1.44 billion although the segment’s operating earnings were down 6 percent, when compared with the same period a year-ago, to $144.4 million.

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