LAKE FOREST, Ill. — For the fourth quarter of 2009, Brunswick Corporation today reported net sales of $657.3 million, down 22 percent from $837.7 million a year earlier. The fourth quarter ended Dec. 31.
For the quarter, the company reported a net loss of $124.0 million, or $1.40 per diluted share, as compared with a net loss of $66.3 million, or $0.75 per diluted share, for the fourth quarter of 2008.
For the year, the company reported net sales of $2.7 billion, down from $4.7 billion a year earlier, and an operating loss of $570.5 million, which included $172.5 million of impairment and restructuring charges. In 2008, the company had an operating loss of $611.6 million, which included $688.4 million of impairment and restructuring charges.
For 2009, the company reported a net loss of $586.2 million, or $6.63 per diluted share, as compared with a net loss of $788.1 million, or $8.93 per diluted share, for 2008.
Net debt (defined as total debt, less cash and cash equivalents) was $324 million, down $90 million from year-end 2008 levels. The company’s total liquidity (defined as cash and cash equivalents, plus amounts available under its asset-backed lending facilities) totaled $615 million, up $96 million from year-end 2008 levels.
Brunswick’s boat segment, which comprises the Brunswick Boat Group and includes 17 boat brands, reported net sales of $153.4 million for the fourth quarter of 2009, down 38 percent compared with $248.0 million in the fourth quarter of 2008. International sales, which represented 40 percent of total segment sales in the quarter, decreased by 51 percent during the period. For the fourth quarter of 2009, the segment reported an operating loss of $131.6 million, including impairment and restructuring charges of $58.3 million. This compares with an operating loss of $59.4 million, including impairment and restructuring charges of $39.4 million, in the fourth quarter of 2008.
Boat manufacturing facilities began to ramp up production during the quarter to address inventory requirements of their dealers, although production levels remained below the prior year quarter.
“Although our plans reflect a modest reduction in retail marine demand, our boat facilities will gradually increase wholesale shipments throughout the year because dealer inventories are at historically low levels,” CEO Dustan McCoy said in the company’s quarterly report. “The increase in wholesale boat shipments will require us to raise production rates throughout the year. Additionally, although over-supply conditions still exist in the overall marine market, we believe that based on our 2009 achievements in lowering our dealer pipeline, the amount of discounts will be lower in 2010 as compared to 2009.”
The company’s marine engine segment, which consists of the Mercury Marine Group, including the marine service, parts and accessories businesses, reported net sales of $302.4 million in the fourth quarter of 2009, down 11 percent from $340.2 million in the year-ago fourth quarter. International sales, which represented 51 percent of total segment sales in the quarter, declined by 3 percent. For the quarter, the Marine Engine segment reported an operating loss of $59.4 million, including restructuring charges of $8.2 million. This compares with an operating loss of $12.9 million in the year-ago quarter, which benefited from a $0.8 million gain related to restructuring activities.
Sales were lower across all marine engine operations, with sterndrive engines experiencing a greater sales decline than outboard engines. Sales from the segment’s domestic marine service, parts and accessories businesses, which represented 22 percent of total segment sales in the quarter, were down mid-single digits, as boat usage and the purchase of parts and accessories remained relatively stable.
Mercury’s manufacturing facilities began to ramp up production during the quarter in response to customer inventory requirements. Lower sales, higher pension expense and restructuring charges as well as a reversal of variable compensation and defined contribution retirement accruals that benefited the fourth quarter of 2008 had an adverse effect on operating earnings comparisons, which were partially offset by Mercury Marine’s expense reductions.
“The factors affecting our Boat segment should also lead to revenue growth in our engine business, but the anticipated sales improvement will be less due to the mix of businesses within the Marine Engine segment,” McCoy said. “Specifically, Mercury’s parts and accessories business and its international operations, which together currently account for roughly 72 percent of the segment’s revenues, are expected to grow at substantially lower rates than Brunswick’s Boat segment.”
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