LAKE FOREST, Ill. — Brunswick Corporation reported total net sales of $1.01 billion in the second quarter, up 41 percent from 2009. Net earnings were $13.7 million.
The Marine Engine segment, which consists of the Mercury Marine Group, including the marine service, parts and accessories businesses, reported net sales of $579.2 million, up 39 percent from $415.2 million in the year-ago second quarter. International sales, which represented 41 percent of total segment sales in the quarter, increased by 28 percent.
Sales were higher across all of the segment's main operations, including a low-teen increase in the domestic marine service, parts and accessories businesses, which represented 28 percent of total segment sales in the quarter. The segment's sterndrive engine business experienced the greatest percentage sales growth.
Mercury's manufacturing facilities continued to increase production during the quarter in response to customer inventory requirements. Higher sales, lower bad debt expense, fixed-cost reductions, increased fixed-cost absorption, improved operating efficiencies, lower restructuring, exit and impairment charges and reduced pension expense all had a positive effect on operating earnings during the quarter.
The Boat segment, which comprises the Brunswick Boat Group and its 16 boat brands, reported net sales of $296.6 million for the second quarter, an increase of 114 percent compared with $138.8 million in the second quarter of 2009. International sales, which represented 38 percent of total segment sales in the quarter, increased by 64 percent during the period. For the second quarter of 2010, the Boat segment reported an operating loss of $23.6 million, including restructuring, exit and impairment charges of $21.7 million. This compares with an operating loss of $107.9 million, including restructuring, exit and impairment charges of $17.9 million, in the second quarter of 2009.
Boat manufacturing facilities continued to increase production during the quarter to address inventory requirements of their dealers. Higher sales, increased fixed-cost absorption, and reduced discounts required to support retail sales by dealers were the primary factors affecting the segment's reduction in operating losses in the quarter.
"The continued successful execution of our strategic initiatives over the past several quarters was a key factor in our improved second quarter results," Brunswick CEO Dustan E. McCoy said in the quarterly report. "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. In addition, during the first half of 2010, our cash balances increased by $93 million and net debt declined by $120 million."
Click here to read the complete Brunswick Second Quarter Report.
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