Brunswick Corporation reported today a net loss of $6.0 million, or 7 cents per diluted share, for the second quarter of 2008, compared with net earnings of $56.9 million, or 63 cents per diluted share, from continuing operations for the same period a year ago. The second quarters of 2008 and 2007 include restructuring charges of $83.1 million, or 59 cents per diluted share, and $1.1 million, or 1 cent per diluted share, respectively. The 2008 charges are primarily for costs associated with previously announced actions aimed at resizing the company and reducing fixed costs by $300 million versus 2007 spending levels by the end of 2009.
For the quarter ended June 28, 2008, net sales decreased to $1.48 billion, down 2 percent from $1.52 billion a year earlier. “Increased sales of commercial fitness equipment, bowling products and from our retail bowling centers, as well as 19 percent growth in non-U.S. sales, helped offset the decline in sales of marine products in the United States,” explained Dustan E. McCoy, Brunswick chairman and chief executive officer.
The company had an operating loss of $17.2 million for the second quarter of 2008, which includes the previously mentioned $83.1 million of restructuring charges, compared with operating earnings of $86.3 million in the year-ago quarter, including the $1.1 million of restructuring charges. The charges in both years were primarily for asset impairments, severance costs and plant shutdown expenses.
“The company continues to generate positive free cash flow, which provides us with significant liquidity and financial flexibility. At quarter end, we had $393 million of cash, up from $267 million at the end of the last quarter,” McCoy said.
Three Months Ended
June 28, June 30,
2008 2007 % Change
Net sales $1,485.4 $1,522.9 -2%
Cost of sales 1,182.0 1,190.3 -1%
Selling, general and administrative
expense 205.5 209.5 -2%
Research and development expense 32.0 35.7 -10%
Restructuring, exit and impairment
charges 83.1 1.1 NM
Operating earnings (loss) (17.2) 86.3 NM
Equity earnings 6.3 7.1 -11%
Investment sale gain 1.2 – NM
Other income (expense), net 0.8 0.2 NM
Earnings (loss) before interest and
income taxes (8.9) 93.6 NM
Interest expense (11.4) (13.3) 14%
Interest income 1.5 1.9 -21%
Earnings (loss) before income taxes (18.8) 82.2 NM
Income tax (benefit) provision (12.8) 25.3
Net earnings (loss) from continuing
operations (6.0) 56.9 NM
Discontinued operations:
Earnings from discontinued
operations, net of tax – 0.6 NM
Loss on disposal of discontinued
operations, net of tax – (0.2) NM
Net earnings from discontinued
operations – 0.4 NM
Net earnings (loss) $(6.0) $57.3 NM
Earnings per common share:
Basic
Net earnings (loss) from continuing
operations $(0.07) $0.63 NM
Earnings from discontinued
operations, net of tax – – NM
Loss on disposal of discontinued
operations, net of tax – – NM
Net earnings (loss) $(0.07) $0.63 NM
Diluted
Net earnings (loss) from continuing
operations $(0.07) $0.63 NM
Earnings from discontinued
operations, net of tax – – NM
Loss on disposal of discontinued
operations, net of tax – – NM
Net earnings (loss) $(0.07) $0.63 NM
Weighted average number of shares
used for computation of:
Basic earnings per share 88.3 90.5 -2%
Diluted earnings per share 88.3 91.0 -3%
Effective tax rate 68.2% 30.8%
Supplemental Information
Diluted net earnings (loss) from
continuing operations $(0.07) $0.63 NM
Restructuring, exit and impairment
charges, net of tax 0.59 0.01 NM
Investment sale gain, net of tax (0.01) – NM
Special tax items (0.03) – NM
Diluted net earnings from continuing
operations, as adjusted $0.48 $0.64 -25%
