LAKE FOREST, Ill. -- Brunswick Corporation reported results for the fourth quarter and full-year of 2014.
“Our results in 2014 represent the fifth consecutive year of strong improvements in operating performance,” said Brunswick Chairman and Chief Executive Officer Dustan E. McCoy. “These outstanding results reflect the strong execution of our business strategy by our global workforce.
“Revenue increased by 7 percent, with U.S. and international sales up 8 percent and 4 percent, respectively. Sales growth was driven by improvements in outboard boats and engines, marine parts and accessories, fitness equipment and fiberglass sterndrive/ inboard boats, partially offset by revenue declines in sterndrive engines. Our revenue performance benefited from recent investments in growth initiatives with several new products being introduced into the marketplace. Sales growth also reflects parts and accessories acquisitions made during the year.
“Our 2014 gross margin of 27.0 percent reflects an increase of 60 basis points from the prior year and represents the highest annual level achieved since 2000. Operating expenses increased by 4 percent, due to higher research and development expense and other growth-related investments primarily associated with company-wide strategic initiatives.
“Strong improvement in adjusted operating earnings, combined with lower net interest expense and higher other income, led to a 32 percent increase in adjusted pretax earnings. This increase was offset by a higher effective tax rate, resulting in $2.42 diluted EPS, as adjusted,” McCoy concluded.
On July 17, 2014, the Company announced: 1) the signing of an agreement to sell its Retail Bowling business, and 2) its intention to sell its Bowling Products business. On Sept. 18, 2014, the sale of the Retail Bowling business was completed. As a result, the historical and future results of these businesses are now reported as discontinued operations and the historical and future results of the Billiards business, which remains part of the Company, are now reflected in the Fitness segment. Therefore, for all periods presented in this release, all figures and outlook statements incorporate these changes and reflect continuing operations only, unless otherwise noted.
2014 Full-Year Results
For the year ended Dec. 31, 2014, the Company reported net sales of $3,838.7 million, up from $3,599.7 million in 2013. For the year, operating earnings were $328.5 million, which included a $27.9 million pension settlement charge related to lump sum payouts and $4.2 million of restructuring, exit and impairment charges. In 2013, the Company reported operating earnings of $281.8 million, which included $16.5 million of restructuring, exit and impairment charges.
For 2014, the Company reported net earnings of $194.9 million, or $2.05 per diluted share, compared with net earnings of $756.8 million, or $8.07 per diluted share, for 2013. The diluted EPS for 2014 included a $0.21 per diluted share impairment charge for a marine equity method investment; $0.19 per diluted share of a pension settlement charge; $0.04 per diluted share of restructuring, exit and impairment charges and a $0.07 per diluted share benefit from special tax items.
The diluted EPS for 2013 included the reversal of deferred tax valuation allowance reserves of $6.39 per diluted share; losses on early extinguishment of debt of $0.32 per diluted share; a $0.31 per diluted share charge from special tax items and restructuring, exit and impairment charges of $0.16 per diluted share.