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LAKE FOREST, Ill., April 27 /PRNewswire-FirstCall/ -- Brunswick Corporation (NYSE: BC) reported today net earnings of $48.0 million, or $0.50 per diluted share, for the first quarter of 2004. This compares to net earnings of $3.8 million, or $0.04 per diluted share for the year-ago quarter, which includes a $25.0 million ($0.18 per diluted share) litigation charge to operating earnings relating to the settlement of a lawsuit.

Commenting on the quarter, Brunswick Chairman and Chief Executive Officer George W. Buckley said, "We started the year on a very strong note with a 28 percent increase in sales in the quarter coming on double-digit gains reported by all of our operating units. The primary drivers were our marine engine and boat groups, which benefited from a better marine retail environment than we've seen in some time. Acquisitions also played a role in the sales gain. Excluding the sales from business units we didn't own in the first quarter last year, sales rose 19 percent, illustrating the strong performance delivered by our base operations. Higher sales and production volumes, along with our ongoing focus on effective cost management, contributed to a doubling of operating earnings to $78.5 million and a 240 basis point improvement in operating margins, excluding the litigation charge. We ended the quarter with our balance sheet in excellent shape. Debt-to-total capital was 30.4 percent at quarter end compared with 35.9 percent a year earlier. Our strong balance sheet provides us with tremendous financial flexibility to pursue additional investment and acquisition opportunities to build our core businesses. All in all it was a great quarter and further evidence of the successful execution of our growth strategy."

First Quarter Results

For the quarter ended March 31, 2004, the company reported a net sales increase of 28 percent to $1,199.6 million, up from $934.5 million a year earlier. Operating earnings rose to $78.5 million compared with $13.0 million in the year-ago quarter, and operating margins improved to 6.5 percent from 1.4 percent. Excluding the $25.0 million litigation charge in the first quarter of 2003, operating earnings totaled $38.0 million, and operating margins were 4.1 percent.

Net earnings totaled $48.0 million, or $0.50 per diluted share, up from $3.8 million, or $0.04 per diluted share, for the first quarter of 2003. Excluding the previously mentioned litigation charge, net earnings totaled $19.8 million, or $0.22 per diluted share, in the first quarter of 2003.

Marine Engine Segment

The Marine Engine segment, consisting of the Mercury Marine Group and Brunswick New Technologies, reported sales of $527.9 million in the first quarter of 2004, up 28 percent from $412.8 million in the year-ago first quarter. Operating earnings in the first quarter more than doubled to $42.6 million versus $19.3 million, and operating margins increased to 8.1 percent compared with 4.7 percent for the same quarter in 2003.

"Mercury Marine had an excellent quarter with strong performances from all units -- outboard and sterndrive engines and parts and accessories -- contributing to the sales gain," Buckley said. "Strong retail demand was the primary driver behind the improved results."

"Highlighting the quarter was the much-anticipated launch of Verado, our family of high-horsepower supercharged four-stroke outboard engines. Customer response to the new engines has been outstanding, and we began shipping product this week," Buckley added. "Verado's power, torque, near-silent running, excellent fuel economy and low-emission characteristics are unlike anything available in the market today. We believe Verado reaffirms Mercury's standing as the technology leader in marine propulsion."

"Brunswick New Technologies (BNT) also contributed to the sales gain for the Marine Engine segment, primarily due to the acquisition of Navman NZ Limited, a producer of global positioning system-based products, which was completed in the second quarter of 2003," Buckley added. "We have been very pleased with Navman's financial results and growth rates, fueled primarily by the success of new products. In addition, Navman, working in conjunction with Northstar and other BNT units, is an important contributor to our product development and boat electronics integration initiatives."

Boat Segment

The Brunswick Boat Group comprises the Boat segment and includes the Sea Ray, Bayliner, Maxum, Hatteras, Sealine, Meridian, Boston Whaler, Trophy, Baja, Crestliner, Lowe, Lund and Princecraft boat brands and the Land 'N' Sea and Attwood marine parts and accessories distribution and manufacturing businesses. The Boat segment reported sales for the first quarter of $512.0 million, up 35 percent compared with $378.6 million in the first quarter of 2003. Boat segment sales benefited from incremental sales from its new parts and accessories (P&A) business, which began with the acquisition of Land 'N' Sea and Attwood last year. Excluding the P&A business, boat sales increased 23 percent in the quarter. Operating earnings increased to $32.0 million, more than double the $14.1 million reported in the first quarter of 2003, and operating margins rose to 6.3 percent, up from 3.7 percent. The acquisition of the Crestliner, Lowe and Lund brands was completed at the end of the quarter and, therefore, did not have any impact on sales or operating earnings for the Boat Group in the first quarter of 2004.

"We are seeing strong retail demand for all of our boat brands, which is leading to stronger wholesale shipments to our dealers," Buckley said. "Early boat shows are showing positive trends. Even more encouraging is that we are seeing strength in all parts of the country and across our entire product range. New models in all portions of the product spectrum are selling especially well, including the Bayliner 175 runabout, the Sea Ray 500 Sundancer, and the Hatteras 80 Motor Yacht. Demand for these particular models is nearly outstripping our ability to supply. Higher volumes and effective cost management account for the significant improvement in operating margins."

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