Delaware | 001-01043 | 36-0848180 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1 N. Field Court Lake Forest, Illinois | 60045-4811 | |
(Address of Principal Executive Offices) | (Zip Code) |
99.1 | News Release, dated January 26, 2017, of Brunswick Corporation, announcing its fourth quarter and full-year 2016 earnings. |
BRUNSWICK CORPORATION | |||
Dated: January 26, 2017 | By: | /S/ DANIEL J. TANNER | |
Daniel J. Tanner | |||
Vice President and Controller | |||
Exhibit No. | Description of Exhibit | |
99.1 | News Release, dated January 26, 2017, of Brunswick Corporation, announcing its fourth quarter and full-year 2016 earnings. |
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Brunswick Corporation 1 N. Field Court Lake Forest, IL 60045 | |
Telephone 847.735.4700 Facsimile 847.735.4750 |
Release: | IMMEDIATE | |
Contact: | Phillip Haan | |
Vice President - Investor Relations | ||
Phone: | 847-735-4092 | |
Contact: | Daniel Kubera | |
Director - Media Relations and Corporate Communications | ||
Phone: | 847-735-4617 | |
Email: | daniel.kubera@brunswick.com | |
• | Consolidated net sales increased 9 percent versus 2015; on a constant currency basis, net sales increased 10 percent; excluding the impact of acquisitions, sales on a constant currency basis increased 5 percent. |
• | On a GAAP basis, operating earnings increased by 24 percent versus the prior year. Adjusted operating earnings were up 13 percent from 2015. |
• | On a GAAP basis, 2016 diluted EPS of $2.98 increased by 24 percent versus 2015. Diluted EPS, as adjusted, of $3.48 increased by 19 percent. |
• | Net cash from operations was $426 million and free cash flow was $234 million; both were improved versus the prior year. |
• | Consolidated net sales increased 10 percent versus fourth quarter 2015; on a constant currency basis, net sales also increased 10 percent; excluding the impact of acquisitions, sales on a constant currency basis increased 4 percent. |
• | On a GAAP basis, operating earnings increased $55.6 million from fourth quarter 2015. Adjusted operating earnings increased to $90.5 million, or 34 percent versus 2015. |
• | On a GAAP basis, diluted EPS of $0.19, an increase of $0.29 versus the fourth quarter of 2015. Diluted EPS, as adjusted, of $0.67 represented a 29 percent increase compared to the prior year. |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Three Months Ended | ||||||||||
December 31, 2016 | December 31, 2015 | % Change | ||||||||
Net sales | $ | 1,083.0 | $ | 986.1 | 10 | % | ||||
Cost of sales | 803.0 | 736.4 | 9 | % | ||||||
Selling, general and administrative expense | 154.5 | 148.3 | 4 | % | ||||||
Research and development expense | 35.0 | 33.7 | 4 | % | ||||||
Pension settlement charge | 55.1 | 82.3 | -33 | % | ||||||
Restructuring, integration and impairment charges | 6.8 | 12.4 | -45 | % | ||||||
Operating earnings (loss) | 28.6 | (27.0 | ) | NM | ||||||
Equity earnings | 1.1 | 0.5 | NM | |||||||
Other income, net | 0.4 | 1.0 | -60 | % | ||||||
Earnings (loss) before interest and income taxes | 30.1 | (25.5 | ) | NM | ||||||
Interest expense | (6.7 | ) | (6.8 | ) | -1 | % | ||||
Interest income | 0.6 | 0.5 | 20 | % | ||||||
Earnings (loss) before income taxes | 24.0 | (31.8 | ) | NM | ||||||
Income tax provision (benefit) | 6.2 | (22.8 | ) | NM | ||||||
Net earnings (loss) from continuing operations | 17.8 | (9.0 | ) | NM | ||||||
Net loss from discontinued operations, net of tax | (0.1 | ) | (0.3 | ) | -67 | % | ||||
Net earnings (loss) | $ | 17.7 | $ | (9.3 | ) | NM | ||||
Earnings per common share: | ||||||||||
Basic | ||||||||||
Earnings (loss) from continuing operations | $ | 0.20 | $ | (0.10 | ) | |||||
Loss from discontinued operations | (0.00 | ) | (0.00 | ) | ||||||
Net earnings (loss) | $ | 0.20 | $ | (0.10 | ) | NM | ||||
Diluted | ||||||||||
Earnings (loss) from continuing operations | $ | 0.19 | $ | (0.10 | ) | |||||
Loss from discontinued operations | (0.00 | ) | (0.00 | ) | ||||||
Net earnings (loss) | $ | 0.19 | $ | (0.10 | ) | NM | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 90.4 | 92.1 | ||||||||
Diluted earnings per common share | 91.2 | 92.1 | ||||||||
Effective tax rate from continuing operations | 25.8 | % | 71.7 | % | ||||||
Reconciliations | ||||||||||
Continuing Operations: | ||||||||||
Operating earnings (loss) | $ | 28.6 | $ | (27.0 | ) | NM | ||||
Pension settlement charge | 55.1 | 82.3 | -33 | % | ||||||
Restructuring, integration and impairment charges | 6.8 | 12.4 | -45 | % | ||||||
Adjusted operating earnings | $ | 90.5 | $ | 67.7 | 34 | % | ||||
Earnings (loss) before income taxes | $ | 24.0 | $ | (31.8 | ) | NM | ||||
Pension settlement charge | 55.1 | 82.3 | -33 | % | ||||||
Restructuring, integration and impairment charges | 6.8 | 12.4 | -45 | % | ||||||
Adjusted pretax earnings | $ | 85.9 | $ | 62.9 | 37 | % | ||||
Earnings (loss) per common share: | ||||||||||
Earnings (loss) from continuing operations | $ | 0.19 | $ | (0.10 | ) | |||||
Pension settlement charge | 0.38 | 0.55 | ||||||||
Restructuring, integration and impairment charges | 0.05 | 0.11 | ||||||||
Special tax items | 0.05 | (0.04 | ) | |||||||
Diluted earnings from continuing operations, as adjusted | $ | 0.67 | $ | 0.52 | 29 | % | ||||
NM = not meaningful |
Brunswick Corporation Comparative Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) | ||||||||||
Twelve Months Ended | ||||||||||
December 31, 2016 | December 31, 2015 | % Change | ||||||||
Net sales | $ | 4,488.5 | $ | 4,105.7 | 9 | % | ||||
Cost of sales | 3,263.4 | 2,991.1 | 9 | % | ||||||
Selling, general and administrative expense | 606.2 | 562.3 | 8 | % | ||||||
Research and development expense | 139.2 | 125.9 | 11 | % | ||||||
Pension settlement charge | 55.1 | 82.3 | -33 | % | ||||||
Restructuring, integration and impairment charges | 15.6 | 12.4 | 26 | % | ||||||
Operating earnings | 409.0 | 331.7 | 23 | % | ||||||
Equity earnings | 4.3 | 3.7 | 16 | % | ||||||
Other income, net | 2.1 | 5.4 | -61 | % | ||||||
Earnings before interest and income taxes | 415.4 | 340.8 | 22 | % | ||||||
Interest expense | (27.5 | ) | (27.8 | ) | -1 | % | ||||
Interest income | 1.8 | 2.2 | -18 | % | ||||||
Earnings before income taxes | 389.7 | 315.2 | 24 | % | ||||||
Income tax provision | 115.3 | 87.8 | 31 | % | ||||||
Net earnings from continuing operations | 274.4 | 227.4 | 21 | % | ||||||
Net earnings from discontinued operations, net of tax | 1.6 | 14.0 | -89 | % | ||||||
Net earnings | $ | 276.0 | $ | 241.4 | 14 | % | ||||
Earnings per common share: | ||||||||||
Basic | ||||||||||
Earnings from continuing operations | $ | 3.01 | $ | 2.45 | ||||||
Earnings from discontinued operations | 0.02 | 0.15 | ||||||||
Net earnings | $ | 3.03 | $ | 2.60 | 17 | % | ||||
Diluted | ||||||||||
Earnings from continuing operations | $ | 2.98 | $ | 2.41 | ||||||
Earnings from discontinued operations | 0.02 | 0.15 | ||||||||
Net earnings | $ | 3.00 | $ | 2.56 | 17 | % | ||||
Weighted average shares used for computation of: | ||||||||||
Basic earnings per common share | 91.2 | 93.0 | ||||||||
Diluted earnings per common share | 92.0 | 94.3 | ||||||||
Effective tax rate from continuing operations | 29.6 | % | 27.9 | % | ||||||
Reconciliations | ||||||||||
Continuing Operations: | ||||||||||
Operating earnings | $ | 409.0 | $ | 331.7 | 23 | % | ||||
Pension settlement charge | 55.1 | 82.3 | -33 | % | ||||||
Restructuring, integration and impairment charges | 15.6 | 12.4 | 26 | % | ||||||
Adjusted operating earnings | $ | 479.7 | $ | 426.4 | 13 | % | ||||
Earnings before income taxes | $ | 389.7 | $ | 315.2 | 24 | % | ||||
Pension settlement charge | 55.1 | 82.3 | -33 | % | ||||||
Restructuring, integration and impairment charges | 15.6 | 12.4 | 26 | % | ||||||
Adjusted pretax earnings | $ | 460.4 | $ | 409.9 | 12 | % | ||||
Earnings (loss) per common share: | ||||||||||
Earnings from continuing operations | $ | 2.98 | $ | 2.41 | ||||||
Pension settlement charge | 0.38 | 0.54 | ||||||||
Restructuring, integration and impairment charges | 0.11 | 0.11 | ||||||||
Special tax items | 0.01 | (0.13 | ) | |||||||
Diluted earnings from continuing operations, as adjusted | $ | 3.48 | $ | 2.93 | 19 | % | ||||
NM = not meaningful |
Brunswick Corporation Selected Financial Information (in millions) (unaudited) Segment Information - Continuing Operations | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) (1) | Operating Margin | |||||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | % Change | December 31, 2016 | December 31, 2015 | % Change | December 31, 2016 | December 31, 2015 | ||||||||||||||||||||
Marine Engine | $ | 500.2 | $ | 474.7 | 5 | % | $ | 51.2 | $ | 41.9 | 22 | % | 10.2 | % | 8.8 | % | |||||||||||
Boat | 358.0 | 336.0 | 7 | % | 14.9 | 2.6 | NM | 4.2 | % | 0.8 | % | ||||||||||||||||
Marine eliminations | (69.9 | ) | (62.3 | ) | 12 | % | — | — | |||||||||||||||||||
Total Marine | 788.3 | 748.4 | 5 | % | 66.1 | 44.5 | 49 | % | 8.4 | % | 5.9 | % | |||||||||||||||
Fitness | 294.7 | 237.7 | 24 | % | 44.0 | 39.9 | 10 | % | 14.9 | % | 16.8 | % | |||||||||||||||
Pension costs | — | — | (58.8 | ) | (85.2 | ) | 31 | % | |||||||||||||||||||
Corporate/Other | — | — | (22.7 | ) | (26.2 | ) | 13 | % | |||||||||||||||||||
Total | $ | 1,083.0 | $ | 986.1 | 10 | % | $ | 28.6 | $ | (27.0 | ) | NM | 2.6 | % | -2.7 | % | |||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||
Net Sales | Operating Earnings (Loss) (2) | Operating Margin | |||||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | % Change | December 31, 2016 | December 31, 2015 | % Change | December 31, 2016 | December 31, 2015 | ||||||||||||||||||||
Marine Engine | $ | 2,441.1 | $ | 2,314.3 | 5 | % | $ | 378.0 | $ | 350.4 | 8 | % | 15.5 | % | 15.1 | % | |||||||||||
Boat | 1,369.9 | 1,274.6 | 7 | % | 60.8 | 37.6 | 62 | % | 4.4 | % | 2.9 | % | |||||||||||||||
Marine eliminations | (302.9 | ) | (277.8 | ) | 9 | % | — | — | |||||||||||||||||||
Total Marine | 3,508.1 | 3,311.1 | 6 | % | 438.8 | 388.0 | 13 | % | 12.5 | % | 11.7 | % | |||||||||||||||
Fitness | 980.4 | 794.6 | 23 | % | 117.3 | 116.5 | 1 | % | 12.0 | % | 14.7 | % | |||||||||||||||
Pension costs | — | — | (69.8 | ) | (94.0 | ) | 26 | % | |||||||||||||||||||
Corporate/Other | — | — | (77.3 | ) | (78.8 | ) | 2 | % | |||||||||||||||||||
Total | $ | 4,488.5 | $ | 4,105.7 | 9 | % | $ | 409.0 | $ | 331.7 | 23 | % | 9.1 | % | 8.1 | % | |||||||||||
Brunswick Corporation Comparative Condensed Consolidated Balance Sheets (in millions) (unaudited) | |||||||
December 31, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents, at cost, which approximates fair value | $ | 422.4 | $ | 657.3 | |||
Short-term investments in marketable securities | 35.8 | 11.5 | |||||
Total cash, cash equivalents and short-term investments in marketable securities | 458.2 | 668.8 | |||||
Restricted cash | 11.2 | 12.7 | |||||
Accounts and notes receivable, net | 417.3 | 398.1 | |||||
Inventories | |||||||
Finished goods | 502.7 | 444.4 | |||||
Work-in-process | 91.1 | 88.4 | |||||
Raw materials | 168.3 | 152.2 | |||||
Net inventories | 762.1 | 685.0 | |||||
Prepaid expenses and other | 39.7 | 39.8 | |||||
Current assets | 1,688.5 | 1,804.4 | |||||
Net property | 645.3 | 505.2 | |||||
Other assets | |||||||
Goodwill | 413.8 | 298.7 | |||||
Other intangibles, net | 164.8 | 55.1 | |||||
Equity investments | 20.7 | 21.5 | |||||
Deferred income tax asset | 276.3 | 420.2 | |||||
Other long-term assets | 43.8 | 47.4 | |||||
Other assets | 919.4 | 842.9 | |||||
Total assets | $ | 3,253.2 | $ | 3,152.5 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities | |||||||
Current maturities of long-term debt | $ | 5.9 | $ | 6.0 | |||
Accounts payable | 392.7 | 339.1 | |||||
Accrued expenses | 566.3 | 563.0 | |||||
Current liabilities | 964.9 | 908.1 | |||||
Debt | 436.5 | 442.5 | |||||
Other long-term liabilities | 443.2 | 520.6 | |||||
Shareholders’ equity | 1,408.6 | 1,281.3 | |||||
Total liabilities and shareholders’ equity | $ | 3,253.2 | $ | 3,152.5 | |||
Supplemental Information | |||||||
Debt-to-capitalization rate | 23.9 | % | 25.9 | % |
Brunswick Corporation Comparative Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | |||||||
Year Ended | |||||||
December 31, 2016 | December 31, 2015 | ||||||
Cash flows from operating activities | |||||||
Net earnings | $ | 276.0 | $ | 241.4 | |||
Less: earnings from discontinued operations, net of tax | 1.6 | 14.0 | |||||
Net earnings from continuing operations | 274.4 | 227.4 | |||||
Depreciation and amortization | 103.9 | 88.9 | |||||
Pension (funding), net of expense | (4.8 | ) | 20.4 | ||||
Other long-lived asset impairment charges | 1.0 | 13.0 | |||||
Deferred income taxes | 62.5 | 43.6 | |||||
Excess tax benefits from share-based compensation | (13.4 | ) | (7.0 | ) | |||
Equity in earnings of unconsolidated affiliates, net of dividends | (4.3 | ) | (3.7 | ) | |||
Changes in certain current assets and current liabilities | (30.4 | ) | (63.7 | ) | |||
Income taxes | 20.2 | 11.4 | |||||
Other, net | 16.6 | 8.0 | |||||
Net cash provided by operating activities of continuing operations | 425.7 | 338.3 | |||||
Net cash used for operating activities of discontinued operations | (3.8 | ) | (14.8 | ) | |||
Net cash provided by operating activities | 421.9 | 323.5 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (193.9 | ) | (132.5 | ) | |||
Purchases of marketable securities | (35.0 | ) | (47.6 | ) | |||
Sales or maturities of marketable securities | 10.7 | 119.3 | |||||
Reductions in restricted cash | 1.5 | 2.9 | |||||
Investments | 5.1 | 0.9 | |||||
Acquisition of businesses, net of cash acquired | (276.1 | ) | (29.7 | ) | |||
Proceeds from the sale of property, plant and equipment | 1.9 | 2.4 | |||||
Other, net | 1.3 | — | |||||
Net cash used for investing activities of continuing operations | (484.5 | ) | (84.3 | ) | |||
Net cash provided by investing activities of discontinued operations | — | 44.5 | |||||
Net cash used for investing activities | (484.5 | ) | (39.8 | ) | |||
Cash flows from financing activities | |||||||
Net proceeds from issuances of long-term debt | 1.0 | 0.1 | |||||
Payments of long-term debt including current maturities | (3.2 | ) | (3.4 | ) | |||
Common stock repurchases | (120.3 | ) | (120.0 | ) | |||
Cash dividends paid | (55.4 | ) | (48.3 | ) | |||
Excess tax benefits from share-based compensation | 13.4 | 7.0 | |||||
Proceeds from share-based compensation activity | 14.9 | 4.5 | |||||
Tax withholding associated with shares issued for share-based compensation | (20.9 | ) | (8.7 | ) | |||
Other, net | (1.9 | ) | — | ||||
Net cash used for financing activities of continuing operations | (172.4 | ) | (168.8 | ) | |||
Net cash provided by financing activities of discontinued operations | — | 5.3 | |||||
Net cash used for financing activities | (172.4 | ) | (163.5 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 0.1 | (15.6 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (234.9 | ) | 104.6 | ||||
Cash and cash equivalents at beginning of period | 657.3 | 552.7 | |||||
Cash and cash equivalents at end of period | $ | 422.4 | $ | 657.3 | |||
Reconciliation | |||||||
Free Cash Flow | |||||||
Net cash provided by operating activities of continuing operations | $ | 425.7 | $ | 338.3 | |||
Net cash provided by (used for): | |||||||
Capital expenditures | (193.9 | ) | (132.5 | ) | |||
Proceeds from the sale of property, plant and equipment | 1.9 | 2.4 | |||||
Effect of exchange rate changes on cash and cash equivalents | 0.1 | (15.6 | ) | ||||
Total free cash flow | $ | 233.8 | $ | 192.6 |
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