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Brunswick Reports Fourth Quarter Results

January 29, 2009 | About:

Press Release: Brunswick Reports Fourth Quarter Results

LAKE FOREST, Ill., Jan. 29 /PRNewswire-FirstCall/ -- Brunswick Corporation(NYSE: BC) reported today results for the fourth quarter of 2008, whichincluded the following:

-- Total sales for the fourth quarter of $837.7 million were down 42       percent versus a year ago, primarily the result of marine sales that       had dropped 50 percent, as weakness in the global marine marketplace       accelerated during the quarter.    -- A net loss from continuing operations of $66.3 million, or $0.75 per       diluted share, for the fourth quarter of 2008, which includes $0.34 per       diluted share of restructuring charges, $0.59 per diluted share of non-       cash tax charges and a benefit of $0.56 per diluted share from the       reversal of variable compensation accruals.    -- Cash on hand at year's end was $317.5 million, down slightly from the       2007 year-end balance of $331.4 million.
"The continued decline in global recreational marine markets experiencedthroughout the first nine months of the year increased during the fourthquarter of 2008, driven by the accelerating decline in global economicconditions. We also began to see the weakening global economy affect ourFitness and Bowling & Billiards segments in the quarter," said Brunswick'sChairman and Chief Executive Officer Dustan E. McCoy.

"In this difficult economic climate we remain focused on three principles:    -- "Maintain strong liquidity, without increasing debt.  We ended the year       with $317.5 million of cash without any borrowings under our revolving       credit agreement, compared with $331.4 million of cash at year-end       2007.  We also enhanced our liquidity and financial flexibility by       completing an amendment to our revolving credit facility in the fourth       quarter of 2008;    -- "Take actions necessary to maintain dealer health.  During 2008 we       reduced the dealer pipeline by 6,700 units, a 22 percent reduction, and       ended the year with 34.5 weeks of product in the pipeline on a trailing       12 months retail basis, compared with 34 weeks at the end of 2007.  Our       weeks-on-hand and the decline in the absolute number of boats in the       pipeline are remarkable in the current retail environment, but burdened       our earnings as we exited 2008 with the percentage decline in our       fiberglass boat manufacturing volumes more than double the percentage       of decline we saw in retail demand; and,    -- "Position our businesses to emerge from the global economic crisis       stronger than before.  Brunswick continues to execute a comprehensive       set of plans to reduce our manufacturing footprint, reduce brands and       models, reduce headcount, consolidate functional activities across       businesses, reduce fixed costs, improve our sourcing and logistics       effectiveness, reduce layers of management, consolidate businesses, and       a myriad of other actions to improve our costs, productivity and       effectiveness in the future.  The results of our work to date are       demonstrated by significant reductions in operating expenses and       improving the operating leverage decline as our sales weaken. These       actions position Brunswick to exit this global economic crisis with a       significantly improved cost structure, a more agile operating model and       an increased focus on the most profitable segments of our business."
Fourth Quarter Results For the quarter ended Dec. 31, 2008, the company reported net sales of$837.7 million, down from $1,436.0 million a year earlier. For the quarter,the company reported an operating loss of $38.4 million, which included $48.9million of restructuring charges and an $81.2 million benefit from thereversal of variable compensation accruals which benefited each of ouroperating segments. In the fourth quarter of 2007, the company had operatingearnings of $14.2 million, which included $8.8 million of restructuringcharges. For the fourth quarter of 2008, Brunswick reported a net loss fromcontinuing operations of $66.3 million, or $0.75 per diluted share, ascompared with net earnings from continuing operations of $12.1 million, or$0.14 per diluted share for the fourth quarter of 2007. Diluted earnings pershare for the fourth quarter of 2008 included restructuring charges of $0.34per diluted share, non-cash tax charges of $0.59 per diluted share and abenefit from the reversal of variable compensation accruals of $0.56 perdiluted share. Diluted earnings per share for the fourth quarter of 2007included $0.07 per diluted share of restructuring charges and $0.05 perdiluted share of tax-related benefits. 2008 Results For the year ended Dec. 31, 2008, the company had net sales of $4,708.7million, compared with $5,671.2 million in 2007. For the year, Brunswickreported an operating loss of $611.6 million, including $511.1 million of non-cash goodwill and trade name impairment charges and $177.3 million ofrestructuring charges. This compares with operating earnings of $107.2million in 2007, which included $66.4 million of trade name impairment chargesand $22.2 million of restructuring charges. For 2008, the company had a net loss from continuing operations of $788.1million, or $8.93 per diluted share, which included $4.43 per diluted share ofgoodwill and trade name impairment charges, $1.25 per diluted share ofrestructuring charges, $0.11 per diluted share gain on investment sales and$3.90 per diluted share of non-cash tax charges, primarily related to amountsprescribed by SFAS No. 109, "Accounting for Income Taxes" and FIN 48,"Accounting for Uncertainty in Income Taxes." This compares with net earningsfrom continuing operations of $79.6 million, or $0.88 per diluted share in2007, which included $0.46 per diluted share of trade name impairment charges,$0.17 per diluted share of restructuring charges, and $0.11 per diluted sharebenefit from special tax items. Boat Segment The Brunswick Boat Group comprises the Boat segment and includes 17 boatbrands, as well as a marine parts and accessories business. The Boat segmentreported net sales for the fourth quarter of 2008 of $293.7 million, down 54percent compared with $645.2 million in the fourth quarter of 2007.International sales, which represented 57 percent of total segment sales inthe quarter, increased by 6 percent during the period. For the fourth quarterof 2008, the Boat segment reported an operating loss of $63.9 million,including restructuring charges of $40.6 million. This compares with anoperating loss of $29.9 million, including restructuring charges of $6.0million in the fourth quarter of 2007. For 2008, Boat segment sales were down approximately 25 percent to$2,011.9 million from $2,690.9 million in 2007. International sales, whichrepresented 38 percent of total segment sales in 2008, increased by 13 percenton a year-to-year basis. For the year, the Boat segment reported an operatingloss of $653.7 million for 2008, including goodwill and trade name impairmentcharges of $483.7 million and restructuring charges of $101.7 million. Thiscompares with an operating loss of $81.4 million for 2007, including $66.4million of trade name impairment charges and $15.9 million in restructuringcharges. "In 2008, we continued to take a number of significant steps to bothaddress the deepening drop in demand in global marine markets, as well asposition our boat businesses to move forward aggressively when marketsstabilize," McCoy explained. "We reduced production, brands, models, themanufacturing footprint, employees, functions, non-manufacturing facilitiesand other costs, while taking steps to improve productivity and effectivenessby such actions as moving multiple brands into single production facilities." Marine Engine Segment The Marine Engine segment, consisting of the Mercury Marine Group,reported net sales of $297.5 million in the fourth quarter of 2008, down 46percent from $548.6 million in the year-ago fourth quarter. Internationalsales, which represented 55 percent of total segment sales in the quarter,declined by 42 percent on a year-to-year basis. For the fourth quarter, theMarine Engine segment reported an operating loss of $8.4 million, whichbenefited from a $2.0 million gain related to restructuring activities. Thiscompares with operating earnings of $21.2 million in the year-ago quarter. For the full year, Marine Engine segment net sales were down 17 percent to$1,955.9 million from $2,357.5 million. International sales, which represented53 percent of total segment sales in 2008, declined by 8 percent on a year-to-year basis. Operating earnings for the full year in 2008 were $68.3 millionversus $183.7 million in 2007. In 2008, the segment recorded $4.5 million oftrade name impairments and $29.4 million of restructuring charges, comparedwith $3.4 million of restructuring charges during the same period in 2007. For the quarter, sales were off across all Marine Engine operations,including a double-digit, year-over-year drop in markets outside the UnitedStates, reflecting the breadth and rapid decline in the global marinemarketplace. In the United States, declines in outboard and sterndrive salestracked those of boat results, reflecting the difficult market conditions inthe final three months of 2008. Consistent with actions taken in the Boat Group, Mercury also cutproduction rates and instituted plant furloughs during the quarter to addresspipeline levels. Reduced fixed-cost absorption on lower sales had an adverseeffect on operating earnings. Fitness Segment The Fitness segment is comprised of the Life Fitness Division, whichmanufactures and sells Life Fitness and Hammer Strength fitness equipment.Fitness segment sales in the fourth quarter of 2008 totaled $171.8 million,down 20 percent from $214.5 million in the year-ago quarter. Internationalsales, which represented 49 percent of total segment sales in the quarter,declined by 18 percent on a year-to-year basis. Operating earnings declined21 percent to $25.6 million from $32.4 million. The segment recorded $1.2million in restructuring charges during the fourth quarter of 2008. For 2008, the Fitness segment reported net sales of $639.5 million, down 2percent from $653.7 million in 2007. International sales, which represented49 percent of total segment sales in 2008, increased by 3 percent on a year-to-year basis. Operating earnings in 2008 declined 13 percent to $52.2million from $59.7 million. The segment recorded $3.3 million inrestructuring charges for the full year during 2008. Commercial equipment sales, which account for the largest percentage ofFitness segment sales, declined by double digits in the quarter as gym andfitness club operators were cautious about ordering equipment in the finalmonths of the year. Consumer sales also were down double digits year-over-year, reflecting the effects of the weakening economy. Likewise, internationalsales were off, particularly in Europe, due to increasing economic pressuresduring the quarter. Operating earnings reflected the favorable effects ofcontinued efforts to reduce operating costs, but were offset by reduced saleslevels and higher steel and fuel costs, which did not begin to subside untillate in the quarter. Bowling & Billiards Segment The Bowling & Billiards segment is comprised of the Brunswick retailbowling centers; bowling equipment and products; and billiards, Air Hockey andfoosball tables. Segment sales in the fourth quarter of 2008 totaled $113.2million, down 8 percent compared with $123.3 million in the year-ago quarter.Operating earnings in the quarter were $16.6 million versus $11.1 million inthe comparable quarter in 2007, which included $3.8 million and $2.8 millionof restructuring costs in 2008 and 2007, respectively. For 2008, the segment reported net sales of $448.3 million, slightlyhigher than $446.9 million recorded for 2007. For the year, the segment hadan operating loss of $12.7 million, which included $22.9 million of goodwilland trade name impairments, and $21.7 million of restructuring charges. Thesegment's 2007 operating earnings of $16.5 million included $2.8 million inrestructuring charges. For the quarter, a mid-single digit increase in bowling product salespartially offset lower sales in billiards and retail bowling. Althoughhistorically recession resistant, economic pressures drove revenues lower bymid-single digits at retail bowling centers. Operating earnings benefitedfrom cost reductions throughout the segment, partially offset by lower levelsof revenue. Company Outlook "As we had anticipated, 2008 proved to be a very challenging year for ourbusinesses and we expect 2009 to also be difficult. We will continue to focuson maintaining our strong liquidity, taking actions necessary to maintaindealer health and positioning ourselves to exit this global downturn as abetter business," McCoy said. "Although we have limited visibility to a very volatile marketplaceentering the year, we expect our revenues to be lower in 2009 with higherrelative percentage declines occurring in the first half of the year. Ourexpectation of lower revenues reflects our view that retail demand willcontinue to decline, at least through the first six months of the year, and weare planning for production at rates well below the retail rate of decline. "Our overall profitability versus 2008 will be affected by the expectedlower production and sales levels, restructuring charges that will decline toapproximately $50 million pretax and incremental pension-related expenses of$75 million pretax. Partially offsetting these factors will be nearly $200million of net cost reductions resulting from the full-year effect of actionstaken in 2008, as well as further cost reduction activities implemented andplanned in 2009. "Liquidity remains important, and although our earnings will be downsignificantly, we believe we can exit 2009 with cash at or above the amountthat we reported on our balance sheet at year-end 2008, without increasedborrowings. This net result will be reflective of our continued focus onmanaging our businesses for cash, which includes vigorous working capitalmanagement plans, primarily centered on reducing our overall inventory levels. "We will continue to carefully and periodically evaluate our re-sizingefforts, including manufacturing footprint, production levels and work forcerequirements, as the market continues to evolve, while weighing capitalspending needs and pursuing continued cost savings efforts. We believe whenthis economic downturn subsides, we will be well positioned to compete andprosper," McCoy said. Conference Call Scheduled Brunswick will host a conference call today at 10 a.m. CST, hosted byDustan E. McCoy, chairman and chief executive officer, Peter B. Hamilton,senior vice president and chief financial officer, and Bruce J. Byots, vicepresident -- corporate and investor relations. The call will be broadcast over the Internet at http://www.brunswick.com.To listen to the call, go to the Web site at least 15 minutes before the callto register, download and install any needed audio software. Security analysts and investors wishing to participate via telephoneshould call (800) 857-1754 (passcode: Brunswick Q4). Callers outside of NorthAmerica should call +1 (517) 308-9227 to be connected. These numbers can beaccessed 15 minutes before the call begins, as well as during the call. Areplay of the conference call will be available through midnight CST Thursday,Feb. 5, 2009, by calling (888) 568-0334 or (402) 530-7881. The replay willalso be available at http://www.brunswick.com. Forward-Looking Statements Certain statements in this news release are forward looking as defined inthe Private Securities Litigation Reform Act of 1995. These statementsinvolve certain risks and uncertainties that may cause actual results todiffer materially from expectations as of the date of this news release.These risks include, but are not limited to: the effect of (i) the amount ofdisposable income available to consumers for discretionary purchases, and (ii)the level of consumer confidence on the demand for marine, fitness, billiardsand bowling equipment, products and services; the ability to successfullycomplete restructuring efforts in the timeframe and cost anticipated; theability to successfully complete the disposition of non-core assets; theeffect of higher product prices due to technology changes and added productfeatures and components on consumer demand; the effect of competition fromother leisure pursuits on the level of participation in boating, fitness,bowling and billiards activities; the effect of interest rates and fuel priceson demand for marine products; the ability to successfully manage pipelineinventories; the financial strength of dealers, distributors and independentboat builders; the ability to maintain mutually beneficial relationships withdealers, distributors and independent boat builders; the ability to maintaineffective distribution and to develop alternative distribution channelswithout disrupting incumbent distribution partners; the ability to maintainmarket share, particularly in high-margin products; the success of new productintroductions; the ability to maintain product quality and service standardsexpected by customers; competitive pricing pressures; the ability to developcost-effective product technologies that comply with regulatory requirements;the ability to transition and ramp up certain manufacturing operations withintime and budgets allowed; the ability to successfully develop and distributeproducts differentiated for the global marketplace; shifts in currencyexchange rates; adverse foreign economic conditions; the success of globalsourcing and supply chain initiatives; the ability to obtain components andraw materials from suppliers; increased competition from Asian competitors;competition from new technologies; the ability to complete environmentalremediation efforts and resolve claims and litigation at the cost estimated;and the effect of weather conditions on demand for marine products and retailbowling center revenues. Additional factors are included in the company'sAnnual Report on Form 10-K for 2007 and Quarterly Report on Form 10-Q/A forthe quarter ended Sept. 27, 2008. About Brunswick Headquartered in Lake Forest, Ill., Brunswick Corporation endeavors toinstill "Genuine Ingenuity"(TM) in all its leading consumer brands, includingMercury and Mariner outboard engines; Mercury MerCruiser sterndrives andinboard engines; MotorGuide trolling motors; Teignbridge propellers; Arvor,Bayliner, Bermuda, Boston Whaler, Cabo Yachts, Crestliner, Cypress Cay,Harris, Hatteras, Kayot, Lowe, Lund, Maxum, Meridian, Ornvik, Princecraft,Quicksilver, Rayglass, Sea Ray, Sealine, Triton, Trophy, Uttern and Valiantboats; Attwood marine parts and accessories; Land 'N' Sea, Kellogg Marine,Diversified Marine and Benrock parts and accessories distributors; IDS dealermanagement systems; Life Fitness and Hammer Strength fitness equipment;Brunswick bowling centers, equipment and consumer products; Brunswickbilliards tables; and Dynamo, Tornado and Valley pool tables, Air Hockey andfoosball tables. For more information, visit http://www.brunswick.com.

Brunswick Corporation    Comparative Consolidated Statements of Operation    (in millions, except per share data)                                          Three Months Ended December 31                                           2008     2007       % Change                                       (unaudited)    Net sales                             $837.7  $1,436.0        -42%    Cost of sales                          719.8   1,174.5        -39%    Selling, general and administrative     expense                                82.3     204.2        -60%    Research and development expense        25.1      34.3        -27%    Goodwill impairment charges               -         -          NM    Trade name impairment charges             -         -          NM    Restructuring, exit and other     impairment charges                     48.9       8.8         NM      Operating earnings (loss)            (38.4)     14.2         NM    Equity earnings (loss)                  (3.6)      4.9         NM    Investment sale gain                      -         -          NM    Other income (expense), net             (4.2)      0.5         NM      Earnings (loss) before interest and       income taxes                        (46.2)     19.6         NM    Interest expense                       (18.6)    (12.6)       -48%    Interest income                          1.3       3.1        -58%      Earnings (loss) before income taxes  (63.5)     10.1         NM    Income tax provision (benefit)           2.8      (2.0)      Net earnings (loss) from continuing       operations                          (66.3)     12.1         NM    Discontinued operations:      Loss from discontinued operations,       net of tax                             -       (6.4)        NM      Gain on disposal of discontinued       operations, net of tax                 -        1.1         NM      Net loss from discontinued       operations                             -       (5.3)        NM      Net earnings (loss)                 $(66.3)     $6.8         NM    Earnings per common share:      Basic        Net earnings (loss) from         continuing operations            $(0.75)    $0.14         NM        Loss from discontinued         operations, net of tax               -      (0.07)        NM        Gain on disposal of discontinued         operations, net of tax               -       0.01         NM        Net earnings (loss)               $(0.75)    $0.08         NM      Diluted        Net earnings (loss) from         continuing operations            $(0.75)    $0.14         NM        Loss from discontinued         operations, net of tax               -      (0.07)        NM        Gain on disposal of discontinued         operations, net of tax               -       0.01         NM        Net earnings (loss)               $(0.75)    $0.08         NM    Weighted average shares used for     computation of:      Basic earnings per share              88.3      88.5          0%      Diluted earnings per share            88.3      88.6          0%    Effective tax rate                     -4.4%    -19.8%    Supplemental Information    Diluted net earnings (loss) from     continuing operations                $(0.75)    $0.14         NM    Restructuring, exit and other     impairment charges, net of tax         0.34      0.07         NM    Special tax items                       0.59     (0.05)        NM    Diluted net earnings from continuing     operations, as adjusted               $0.18     $0.16         13%    Brunswick Corporation    Comparative Consolidated Statements of Operation    (in millions, except per share data)                                              Years Ended December 31                                            2008      2007      % Change                                        (unaudited)    Net sales                             $4,708.7  $5,671.2       -17%    Cost of sales                          3,841.3   4,513.4       -15%    Selling, general and administrative     expense                                 668.4     827.5       -19%    Research and development expense         122.2     134.5        -9%    Goodwill impairment charges              377.2        -         NM    Trade name impairment charges            133.9      66.4        NM    Restructuring, exit and other     impairment charges                      177.3      22.2        NM      Operating earnings (loss)             (611.6)    107.2        NM    Equity earnings                            6.5      21.3       -69%    Investment sale gains                     23.0        -         NM    Other income (expense), net               (2.6)      7.8        NM      Earnings (loss) before interest and       income taxes                         (584.7)    136.3        NM    Interest expense                         (54.2)    (52.3)       -4%    Interest income                            6.7       8.7       -23%      Earnings (loss) before income taxes   (632.2)     92.7        NM    Income tax provision                     155.9      13.1      Net earnings (loss) from continuing       operations                           (788.1)     79.6        NM    Discontinued operations:      Earnings from discontinued       operations, net of tax                   -        2.2        NM      Gain on disposal of discontinued       operations, net of tax                   -       29.8        NM      Net earnings from discontinued       operations                               -       32.0        NM      Net earnings (loss)                  $(788.1)   $111.6        NM    Earnings per common share:      Basic        Net earnings (loss) from         continuing operations              $(8.93)    $0.88        NM        Earnings from discontinued         operations, net of tax                 -       0.02        NM        Gain on disposal of discontinued         operations, net of tax                 -       0.34        NM        Net earnings (loss)                 $(8.93)    $1.24        NM      Diluted        Net earnings (loss) from         continuing operations              $(8.93)    $0.88        NM        Earnings from discontinued         operations, net of tax                 -       0.02        NM        Gain on disposal of discontinued         operations, net of tax                 -       0.34        NM        Net earnings (loss)                 $(8.93)    $1.24        NM    Weighted average shares used for     computation of:      Basic earnings per share                88.3      89.8        -2%      Diluted earnings per share              88.3      90.2        -2%    Effective tax rate                      -24.7%     14.1%    Supplemental Information    Diluted net earnings (loss) from     continuing operations                  $(8.93)    $0.88        NM    Goodwill impairment charges, net of     tax                                      3.40       -          NM    Trade name impairment charges, net of     tax                                      1.03      0.46        NM    Restructuring, exit and other     impairment charges, net of tax           1.25      0.17        NM    NBK investment sale gain, net of tax     (0.11)      -          NM    Special tax items                         3.90     (0.11)       NM    Diluted net earnings from continuing     operations, as adjusted                 $0.54     $1.40       -61%    Brunswick Corporation    Selected Financial Information    (in millions)    (unaudited)    Segment Information                               Three Months Ended December 31                                                                   Operating                       Net Sales         Operating Earnings(1)       Margin                 2008     2007  Change   2008     2007   Change   2008    2007    Boat        $293.7   $645.2  -54%  $(63.9)   $(29.9)    NM   -21.8%  -4.6%    Marine     Engine      297.5    548.6  -46%    (8.4)     21.2     NM    -2.8%   3.9%    Marine     eliminations(38.4)   (95.6)            -         -    Total Marine 552.8  1,098.2  -50%   (72.3)     (8.7)    NM   -13.1%  -0.8%    Fitness      171.8    214.5  -20%    25.6      32.4    -21%   14.9%  15.1%    Bowling &     Billiards   113.2    123.3   -8%    16.6      11.1     50%   14.7%   9.0%    Eliminations  (0.1)       -             -         -    Corp/Other       -        -          (8.3)    (20.6)    60%      Total     $837.7 $1,436.0  -42%  $(38.4)    $14.2     NM    -4.6%   1.0%                                  Years Ended December 31                                                                    Operating                      Net Sales           Operating Earnings(2)      Margin              2008     2007     Change    2008      2007  Change  2008    2007    Boat    $2,011.9  $2,690.9   -25%   $(653.7)   $(81.4)   NM  -32.5%  -3.0%    Marine     Engine  1,955.9   2,357.5   -17%      68.3     183.7   -63%   3.5%   7.8%    Marine     elimin-     ations   (346.7)   (477.6)               -         -    Total     Marine  3,621.1   4,570.8    -21%   (585.4)    102.3    NM  -16.2%   2.2%    Fitness    639.5     653.7     -2%     52.2      59.7   -13%   8.2%   9.1%    Bowling &     Billiards 448.3     446.9      0%    (12.7)     16.5    NM   -2.8%   3.7%    Elimin-     ations     (0.2)     (0.2)               -         -    Corp/     Other         -         -            (65.7)    (71.3)    8%      Total $4,708.7  $5,671.2    -17%  $(611.6)   $107.2    NM  -13.0%   1.9%
(1) Operating earnings in the fourth quarter of 2008 include $48.9million of pretax restructuring, exit and other impairment charges. The $48.9million charge consists of $40.6 million in the Boat segment, ($2.0) millionin the Marine Engine segment, $3.8 million in the Bowling & Billiards segment,$1.2 million in the Fitness segment and $5.3 million in Corp/Other. Operatingearnings in the fourth quarter of 2007 include $8.8 million of pretaxrestructuring, exit and other impairment charges. The $8.8 million consists of$6.0 million in the Boat segment and $2.8 million in the Bowling & Billiardssegment. (2) Operating earnings in 2008 include $688.4 million of pretax goodwillimpairment charges, trade name impairment charges and restructuring, exit andother impairment charges. The $688.4 million consists of $585.4 million in theBoat segment, $33.9 million in the Marine Engine segment, $44.6 million in theBowling & Billiards segment, $3.3 million in the Fitness segment and $21.2million in Corp/Other. Operating earnings in 2007 include $88.6 million ofpretax trade name impairment charges and restructuring, exit and otherimpairment charges. The $88.6 million consists of $82.3 million in the Boatsegment, $3.4 million in the Marine Engine segment, $2.8 million in theBowling & Billiards segment and $0.1 million in Corp/Other.

Brunswick Corporation    Comparative Condensed Consolidated Balance Sheets    (in millions)                                               December 31,      December 31,                                                    2008              2007                                                (unaudited)    Assets    Current assets      Cash and cash equivalents                     $317.5            $331.4      Accounts and notes receivables, net            444.8             572.4      Inventories         Finished goods                              457.7             446.7         Work-in-process                             248.2             323.4         Raw materials                               105.8             136.6           Net inventories                           811.7             906.7      Deferred income taxes                          103.2             249.9      Prepaid expenses and other                      59.7              53.9           Current assets                          1,736.9           2,114.3    Net property                                     917.6           1,052.8    Other assets      Goodwill, net                                  290.9             678.9      Other intangibles, net                          86.6             245.6      Investments                                     75.4             132.1      Other long-term assets                         116.5             141.9           Other assets                              569.4           1,198.5    Total assets                                  $3,223.9          $4,365.6    Liabilities and shareholders' equity    Current liabilities      Short-term debt                                 $3.2              $0.8      Accounts payable                               301.3             437.3      Accrued expenses                               696.7             858.1          Current liabilities                      1,001.2           1,296.2    Long-term debt                                   728.5             727.4    Other long-term liabilities                      764.3             449.1    Common shareholders' equity                      729.9           1,892.9    Total liabilities and shareholders'     equity                                       $3,223.9          $4,365.6    Supplemental Information    Debt-to-capitalization rate                      50.1%             27.8%    Brunswick Corporation    Comparative Condensed Consolidated Statements of Cash Flows    (in millions)                                                     Year Ended December 31                                                     2008               2007                                                  (unaudited)    Cash flows from operating activities     Net earnings (loss)                            $(788.1)           $111.6     Less: net earnings from discontinued      operations                                         -               32.0     Net earnings (loss) from continuing      operations                                     (788.1)             79.6     Depreciation and amortization                    177.2             180.1     Changes in non-cash current assets      and current liabilities                        (100.0)              3.5     Goodwill impairment charges                      377.2                -     Trade name impairment charges                    133.9              66.4     Other impairment charges                          53.2               0.4     Income taxes and other, net                      134.5              14.1        Net cash provided by (used for) operating         activities of continuing operations          (12.1)            344.1        Net cash used for operating activities of         discontinued  operations                        -              (29.8)        Net cash provided by (used for) operating         activities                                   (12.1)            314.3    Cash flows from investing activities     Capital expenditures                            (102.0)           (207.7)     Acquisitions of businesses, net of cash      acquired                                           -               (6.2)     Investments                                       20.0               4.1     Proceeds from investment sales                    45.5                -     Proceeds from sale of property, plant and      equipment                                        28.3              10.1     Other, net                                        17.2              25.6        Net cash provided by (used for) investing         activities of continuing operations            9.0            (174.1)        Net cash provided by investing activities of         discontinued operations                         -               75.6        Net cash provided by (used for) investing         activities                                     9.0             (98.5)    Cash flows from financing activities     Net issuances of short-term debt                  (7.4)               -     Net proceeds from issuance of long-term debt     252.0               0.7     Payments of long-term debt including current      maturities                                     (251.0)             (0.9)     Cash dividends paid                               (4.4)            (52.6)     Stock repurchases                                   -             (125.8)     Stock options exercised                             -               10.8        Net cash used for financing activities of         continuing operations                        (10.8)           (167.8)        Net cash used for financing activities of         discontinued operations                         -                 -        Net cash used for financing activities        (10.8)           (167.8)    Net increase (decrease) in cash and cash     equivalents                                      (13.9)             48.0    Cash and cash equivalents at beginning of period  331.4             283.4    Cash and cash equivalents at end of period       $317.5            $331.4    Free Cash Flow from Continuing     Operations     Net cash provided by (used for) operating      activities of continuing operations            $(12.1)           $344.1     Net cash provided by (used for):          Capital expenditures                       (102.0)           (207.7)          Proceeds from investment sales               45.5                -          Proceeds from sale of property, plant and           equipment                                   28.3              10.1          Other, net                                   17.2              25.6     Total free cash flow from continuing operations $(23.1)           $172.1
(1) Operating earnings in the fourth quarter of 2008 include $48.9million of pretax restructuring, exit and other impairment charges. The $48.9million charge consists of $40.6 million in the Boat segment, ($2.0) millionin the Marine Engine segment, $3.8 million in the Bowling & Billiards segment,$1.2 million in the Fitness segment and $5.3 million in Corp/Other. Operatingearnings in the fourth quarter of 2007 include $8.8 million of pretaxrestructuring, exit and other impairment charges. The $8.8 million consists of$6.0 million in the Boat segment and $2.8 million in the Bowling & Billiardssegment. (2) Operating earnings in 2008 include $688.4 million of pretax goodwillimpairment charges, trade name impairment charges and restructuring, exit andother impairment charges. The $688.4 million consists of $585.4 million in theBoat segment, $33.9 million in the Marine Engine segment, $44.6 million in theBowling & Billiards segment, $3.3 million in the Fitness segment and $21.2million in Corp/Other. Operating earnings in 2007 include $88.6 million ofpretax trade name impairment charges and restructuring, exit and otherimpairment charges. The $88.6 million consists of $82.3 million in the Boatsegment, $3.4 million in the Marine Engine segment, $2.8 million in theBowling & Billiards segment and $0.1 million in Corp/Other.

Source: PRNewsWire

Gurus who own BC

BC is in the portfolios of Richard Snow, Arnold Schneider.

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