The company reprted sales of $995.3 million in the first quarter, up from $959.6 million a year earlier. Operating earnings reached $89.9 million, which included $5.6 million of restructuring, exit and impairment charges. In the first quarter of 2012, the Company had operating earnings of $75.3 million, which included $0.2 million of restructuring, exit and impairment charges.
Net earnings from continuing operations of $54.9 million, or $0.59 per diluted share, compared with net earnings from continuing operations of $47.0 million, or $0.51 per diluted share, for the first quarter of 2012. The diluted earnings per share for the first quarter of 2013 included $0.05 per diluted share of restructuring, exit and impairment charges and a $0.12 per diluted share charge from special tax items. The diluted earnings per share for the first quarter of 2012 included a $0.01 per diluted share charge from special tax items.
“Our first quarter results reflected solid top-line growth combined with excellent improvements in operating and net earnings,” said Brunswick Chairman and Chief Executive Officer Dustan E. McCoy.
“Revenue growth in the quarter was led by U.S. outboard marine products, marine parts and accessories and fitness equipment, partially offset by declines in fiberglass sterndrive/inboard products and in our bowling businesses.
Fitness segment
The Fitness segment is comprised of the Life Fitness Division, which designs, manufactures, and sells Life Fitness and Hammer Strength fitness equipment. Fitness segment sales in the first quarter of 2013 totaled $166.2 million, up 6 percent from $157.1 million in the first quarter of 2012. International sales, which represented 50 percent of total segment sales in the quarter, increased by 11 percent. For the quarter, the Fitness segment reported operating earnings of $24.5 million. This compares with operating earnings of $23.7 million in the first quarter of 2012.
The increase in sales reflected gains in international markets and growth to U.S. health club customers. Operating earnings increased by 3 percent in the first quarter of 2013, when compared with 2012, as a result of higher sales combined with a favorable insurance settlement, partially offset by investments in growth initiatives.
2013 outlook
“As a result of our solid performance in the first quarter and a more favorable anticipated tax rate, we are increasing our 2013 diluted earnings per share from continuing operations, as adjusted, expectation to a range of $2.30 to $2.50 per diluted share,” McCoy said. "Although very early in the selling season, first quarter U.S. marine retail demand was below our expectations as a result of weather conditions in important boating markets and perhaps other economic factors. Our operating plans for the remainder of the year remain consistent with the planning assumptions we communicated at the outset of the year, which reflected global economic conditions generally comparable to 2012, with weakness continuing in Europe.
“We expect to continue to experience an uneven recovery in the U.S. powerboat market, with our outboard boat and engine products and global parts and accessories businesses generating solid growth. Our assumptions continue to reflect weak market conditions challenging the large fiberglass boat category, which will affect both fiberglass boat and sterndrive engine sales and production.
“Positive health and wellness trends, combined with exciting new products, have positioned our fitness business to deliver excellent results again in 2013, and our bowling business should further leverage its competitive advantages with improving top- line performance expected in the second half of the year.
“Against this backdrop, we continue to target 3 percent to 5 percent growth in overall revenue in 2013. Our current plan reflects a modest improvement in gross margin levels, as the strong increase experienced in the first quarter is expected to moderate over the remainder of the year. Our organic growth platform will benefit from increased 2013 investments in capital projects and research and development programs, along with the SG&A to support them. As a result of these initiatives, full-year operating expenses, as a percentage of sales, are expected to be comparable to 2012 levels.”
Source Brunswick Corp through SportsOneSource
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