Brunswick Corporation (NYSE: BC) today announced preliminary
financial results for the fiscal second quarter ended July 1, 2023,
anticipating:
- Revenue of approximately $1.7B.
- GAAP EPS in the range of $1.85 to $1.90 and Adjusted EPS in the
range of $2.30 to $2.35; and
- Strong Free Cash Flow generation.
The preliminary results are below initial expectations for the
quarter due solely to the impacts of the recent IT security
incident that was disclosed in June, absent which, the Company
believes it would have met or exceeded the Adjusted EPS guidance
previously provided for the second quarter.
“The second quarter financial impact of the production and
distribution disruption was felt almost entirely within our
Propulsion and Engine P&A segments and, while our facilities
and systems are now fully operational, because of the proximity of
the disruption to the end of the quarter, there was limited
opportunity to recover in the period,” said Dave Foulkes, Brunswick
Corporation CEO. “As we look to the balance of the year, we see
opportunity to recover some of the losses but the lost production
of high horsepower outboard engines will be difficult to compensate
because we plan to be in full production for the balance of the
year with limited ability to overdrive.”
“For the full year, while we see some positive signals, with
stronger than expected new boat retail in the recent months and
continued high Mercury retail market share, the impact of the IT
security incident combined with anticipated continued pressure on
consumers globally, lead us to be cautious regarding second-half
financial performance. These factors, coupled with our disciplined
management of inventory levels across our businesses as we plan
forward, direct our full-year Adjusted EPS expectations to now be
approximately $9.50.”
The Company will provide more details on its second quarter
results and full-year outlook during its earnings call on July 27,
2023.
Use of Non-GAAP Financial Information
A reconciliation of GAAP to non-GAAP financial measures used in
this release is provided in the reconciliation section accompanying
this release.
In order to better align Brunswick's reported results with the
internal metrics used by Brunswick's management to evaluate
business performance as well as to provide better comparisons to
prior periods and peer data, non-GAAP measures used in this release
exclude the impact of purchase accounting amortization related to
acquisitions, among other adjustments.
Brunswick does not provide forward-looking guidance for certain
financial measures on a GAAP basis because it is unable to predict
certain items contained in the GAAP measures without unreasonable
efforts. These items may include restructuring, exit and impairment
costs, special tax items, acquisition-related costs, and certain
other unusual adjustments.
Second Quarter Earnings and Conference Call Scheduled
for July 27, 2023
Brunswick Corporation (NYSE: BC) will release its second quarter
2023 financial results on Thursday, July 27, 2023 before the market
opens by way of an advisory release, notifying the public that the
complete and full-text results will be available on the Company’s
website at https://ir.brunswick.com. The results will also be
available on the SEC’s website with the Form 8-K filing of the
release at http://goo.gl/wJQN1.
The Company will hold a conference call at 10 a.m. CST/ 11 a.m.
EST, Thursday, July 27, 2023, hosted by David M. Foulkes, chief
executive officer, Ryan M. Gwillim, executive vice president and
chief financial officer and Neha Clark, senior vice president,
enterprise finance. A copy of the presentation to be used on this
call will be available when the results are released as noted
above.
Security analysts and investors wishing to participate via
telephone should call 877-900-9524 (No Password Needed). Callers
outside of North America should call 412-902-0029 (No Password
Needed) to be connected. These numbers can be accessed 15 minutes
before the call begins, as well as during the call.
To listen via the Internet, go to www.brunswick.com/investors.
Please go to the website at least 15 minutes before the call to
register, download and install any needed audio software.
A replay of the conference call will be available through 1pm
CST August 3, 2023, by calling 877-660-6853 or 201-612-7415 (Access
ID: 13739782). The replay also will be available at
www.brunswick.com/investors. Forward-Looking
Statements
Certain statements in this news release are forward-looking
statements as defined in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are based on current
expectations, estimates, and projections about Brunswick’s business
and by their nature address matters that are, to different degrees,
uncertain. Words such as “may,” “could,” “should,” “expect,”
"anticipate," "project," "position," “intend,” “target,” “plan,”
“seek,” “estimate,” “believe,” “predict,” “outlook,” and similar
expressions are intended to identify forward-looking statements.
Forward-looking statements are not guarantees of future performance
and involve certain risks and uncertainties that may cause actual
results to differ materially from expectations as of the date of
this news release. These risks include, but are not limited to: the
effect of adverse general economic conditions, including the amount
of disposable income consumers have available for discretionary
spending; changes in currency exchange rates; fiscal and monetary
policy changes; higher energy and fuel costs; competitive pricing
pressures; adverse capital market conditions; actual or anticipated
increases in costs, disruptions of supply, or defects in raw
materials, parts, or components we purchase from third parties;
supplier manufacturing constraints, increased demand for shipping
carriers, and transportation disruptions; managing our
manufacturing footprint; international business risks, geopolitical
tensions or conflicts, sanctions, embargoes, or other regulations;
public health emergencies or pandemics, such as the coronavirus
(COVID-19) pandemic; adverse weather conditions, climate change
events and other catastrophic event risks; our ability to develop
new and innovative products and services at a competitive price;
loss of key customers; our ability to meet demand in a rapidly
changing environment; absorbing fixed costs in production; risks
associated with joint ventures that do not operate solely for our
benefit; our ability to integrate acquisitions, including Navico,
and the risk for associated disruption to our business; our ability
to successfully implement our strategic plan and growth
initiatives; attracting and retaining skilled labor, implementing
succession plans for key leadership, and executing organizational
and leadership changes; our ability to identify, complete, and
integrate targeted acquisitions; the risk that restructuring or
strategic divestitures will not provide business benefits;
maintaining effective distribution; dealers and customers being
able to access adequate financing; requirements for us to
repurchase inventory; inventory reductions by dealers, retailers,
or independent boat builders; risks related to the Freedom Boat
Club franchise business model; outages, breaches, or other
cybersecurity events regarding our technology systems, which have
affected and could further affect manufacturing and business
operations and could result in lost or stolen information and
associated remediation costs; ongoing impacts on our business as a
result of the June 2023 IT security incident; our ability to
protect our brands and intellectual property; changes to U.S. trade
policy and tariffs; any impairment to the value of goodwill and
other assets; product liability, warranty, and other claims risks;
legal, environmental, and other regulatory compliance, including
increased costs, fines, and reputational risks; changes in income
tax legislation or enforcement; managing our share repurchases; and
risks associated with certain divisive shareholder activist
actions.
Additional risk factors are included in the Company’s Annual
Report on Form 10-K for 2022. Forward-looking statements speak only
as of the date on which they are made, and Brunswick does not
undertake any obligation to update them to reflect events or
circumstances after the date of this news release.
About Brunswick
Brunswick Corporation (NYSE: BC) is the global leader in marine
recreation, delivering innovation that transforms experiences on
the water and beyond. Our unique, technology-driven solutions are
informed and inspired by deep consumer insights and powered by our
belief that “Next Never Rests™”. Brunswick is dedicated to industry
leadership, to being the best and most trusted partner to our many
customers, and to building synergies and ecosystems that enable us
to challenge convention and define the future. Brunswick is home to
more than 60 industry-leading brands. In the category of Marine
Propulsion, these brands include, Mercury Marine, Mercury Racing
and MerCruiser. Brunswick’s comprehensive collection of parts,
accessories, distribution, and technology brands includes Mercury
Parts & Accessories, Land ‘N’ Sea, Lowrance, Simrad, B&G,
Mastervolt, RELiON, Attwood and Whale. Our boat brands are some of
the best known in the world, including Boston Whaler, Lund, Sea
Ray, Bayliner, Harris Pontoons, Princecraft and Quicksilver. Our
service, digital and shared-access businesses include Freedom Boat
Club, Boateka and a range of financing, insurance, and extended
warranty businesses. While focused primarily on the marine
industry, Brunswick also successfully leverages its portfolio of
advanced technologies to deliver an exceptional suite of solutions
in mobile and industrial applications. Headquartered in Mettawa,
IL, Brunswick has more than 18,500 employees operating in 29
countries. In 2022, Brunswick was named by Forbes as a World’s Best
Employer and as one of America’s Most Responsible Companies by
Newsweek, both for the third consecutive year. For more
information, visit www.Brunswick.com.
Brunswick CorporationReconciliation of
Non-GAAP Measure - Consolidated(unaudited)
|
Diluted Earnings Per Share |
|
Three Months Ended |
|
July 1, 2023 |
|
Low |
|
High |
GAAP |
$ |
1.85 |
|
$ |
1.90 |
Restructuring, exit and
impairment charges |
|
0.16 |
|
|
0.16 |
Purchase accounting
amortization |
|
0.15 |
|
|
0.15 |
IT security incident
costs |
|
0.09 |
|
|
0.09 |
Acquisition, integration, and
IT related costs |
|
0.05 |
|
|
0.05 |
As Adjusted |
$ |
2.30 |
|
$ |
2.35 |
Lee Gordon
Vice President - Brunswick Global Communications & Public Affairs
847-735-4003
lee.gordon@brunswick.com
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