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BC/Mercury Marine report earnings

Old 07-29-2004, 09:38 AM
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Default BC/Mercury Marine report earnings

Brunswick Reports EPS of $0.93 in Second Quarter
LAKE FOREST, Ill., July 29 /PRNewswire-FirstCall/ --

Second Quarter Results

For the quarter ended June 30, 2004, net sales increased 33 percent to $1,422.7 million, up from $1,071.0 million a year earlier. Operating earnings rose to $139.5 million compared with $87.2 million in the year-ago quarter, and operating margins improved to 9.8 percent from 8.1 percent. Net earnings totaled $90.1 million, or $0.93 per diluted share, up 68 percent from $53.6 million, or $0.59 per diluted share, for the second quarter of 2003.

Marine Engine Segment

The Marine Engine segment, consisting of the Mercury Marine Group and Brunswick New Technologies (BNT), reported sales of $665.2 million in the second quarter of 2004, up 27 percent from $521.9 million in the year-ago second quarter. Operating earnings in the second quarter increased 49 percent to $95.6 million versus $64.2 million, and operating margins advanced 210 basis points to 14.4 percent compared with 12.3 percent for the same quarter in 2003.

"While recent acquisitions contributed to this segment's solid results, sales for our core marine engine operations alone were up 21 percent, well outstripping industry numbers. Sales of outboard and sterndrive engines were up double digits for the quarter as were our parts and accessories and international sales," Buckley said. "A strong retail environment and excitement generated by our new Verado outboard engine, which we started shipping in April, helped set a positive tone and build momentum for the quarter."

"When we launched Verado in February, we promised it would be unlike anything seen in the marketplace today, and we have succeeded in doing that," Buckley said. "Customer response has been very enthusiastic with Verado garnering critical acclaim and industry buzz. This high-horsepower, four- stroke outboard range is the only production supercharged engine on the market. Our investment has produced an engine unmatched in power, torque, near-silent running, excellent fuel economy and low-emissions."

"During the quarter, BNT continued on plan, establishing itself as an integral, growing and increasingly valuable member of the Brunswick family," Buckley said. "While all BNT units did well, we have been particularly pleased with the performance of Navman NZ Limited, a producer of global positioning system-based products. Indeed, during the quarter, we purchased the remaining 30 percent of Navman, which had been our intent when we made the initial investment in June 2003. We believe that the combined strengths of Navman and Brunswick will lead to continued growth and more innovative products in this increasingly important market segment."

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 second quarter of $629.9 million, up 50 percent compared with $418.9 million in the second quarter of 2003. Boat segment sales for the quarter benefited from the full impact of our 2003 acquisitions of Land 'N' Sea and Attwood, which serve as the foundation for a new boat parts and accessories business, as well as the Crestliner, Lowe and Lund aluminum boat brands acquired at the end of the first quarter of 2004. Excluding the sales of these businesses, Boat segment sales increased 17 percent in the quarter. Operating earnings increased to $57.0 million, 76 percent ahead of the $32.3 million reported in the second quarter of 2003, and operating margins rose 130 basis points to 9.0 percent, up from 7.7 percent.

"We are particularly gratified by the performance of our leading boat brands," Buckley explained. "US Marine, maker of our Bayliner brand, joins our Sea Ray, Boston Whaler, Baja and Sealine brands registering double-digit sales gains for the quarter. Such performance points to our boat brands' appeal and reach, as well as our continuing focus on leading-edge products and innovation. The Bayliner 175 runabout, the Sea Ray 500 Sundancer, the Boston Whaler 305 Conquest and the Trophy 2502 Walkaround are among our best selling models. But, we also saw superb growth in all of our new models and a strong order book emerging on large boats, especially Hatteras, which is as good or better than what we saw in 1999."

"I'm also pleased to report that US Marine continued its quite remarkable turnaround, operating profitably for a second consecutive quarter, with sales up 29 percent in the quarter," Buckley noted. "Further, our Boat Group continues to benefit from higher volumes and effective cost management, which also contributed to the improved operating margins in the quarter."
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