<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
X Quarterly Report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
Commission file number 1-1043
BRUNSWICK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-0848180
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 N. Field Ct., Lake Forest, Illinois 60045-4811
(Address of principal executive offices) (Zip Code)
(847) 735-4700
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
At November 11, 1996, there were 98,419,406 shares of the
Company's Common Stock($.75 par value) outstanding.
<PAGE>
Part I- Financial Information
Item I-Financial Statements
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Brunswick Corporation
Consolidated Results Of Operations
for the periods ended September 30
(dollars in millions, except per share data)
Quarter Nine Months
ended September 30 ended September 30
1996 1995 1996 1995
(unaudited)
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Net sales $ 763.6 $ 694.6 $ 2,360.8 $ 2,240.8
Cost of sales 556.1 506.0 1,682.0 1,605.9
Selling, general and administrative 141.5 135.0 422.9 412.0
Restructuring charges and management
transition expenses - - - 40.0
Operating earnings 66.0 53.6 255.9 182.9
Interest expense (8.3) (8.0) (24.3) (23.9)
Interest income and other items, net 3.2 8.2 15.2 14.7
Earnings before income taxes 60.9 53.8 246.8 173.7
Income tax provision 20.4 18.8 90.1 62.5
Earnings from continuing operations 40.5 35.0 156.7 111.2
Loss on disposition of Technical segment - - - (7.0)
Earnings (loss) from discontinued operations - (0.3) - 0.8
Net earnings $ 40.5 $ 34.7 $ 156.7 $ 105.0
Earnings (loss) per common share
Continuing operations $ 0.41 $ 0.36 $ 1.59 $ 1.15
Loss on disposition of Technical segment - - - (0.07)
Earnings (loss) from discontinued operations - - - 0.01
Net earnings per common share $ 0.41 $ 0.36 $ 1.59 $ 1.09
Cash dividends declared per common share $ 0.125 $ 0.125 $ 0.375 $ 0.375
The notes are an integral part of these consolidated statements.
</TABLE>
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<TABLE>
Brunswick Corporation
Consolidated Balance Sheet
As of September 30, 1996 and December 31, 1995
(dollars in millions)
September 30, December 31,
1996 1995
Assets (unaudited)
Current assets
Cash and cash equivalents, at cost, which
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approximates market $ 76.0 $ 344.3
Marketable securities - 11.2
Accounts and notes receivable, less allowances
of $19.8 and $16.9 402.0 253.2
Inventories 488.1 386.6
Prepaid income taxes 213.7 203.8
Prepaid expenses 41.7 34.0
Income tax refund receivable - 15.0
Current assets 1,221.5 1,248.1
Property
Land 64.5 61.5
Buildings 397.5 369.1
Equipment 761.8 683.1
Total land, buildings and equipment 1,223.8 1,113.7
Accumulated depreciation (632.7) (594.1)
Net land, buildings and equipment 591.1 519.6
Unamortized product tooling costs 62.4 63.3
Net property 653.5 582.9
Other assets
Dealer networks 99.4 116.9
Trademarks and other 194.8 158.7
Excess of cost over net assets of businesses acquired 355.3 119.0
Investments 75.9 85.0
Other assets 725.4 479.6
Assets of continuing operations 2,600.4 2,310.6
Net assets of discontinued operations - 23.5
Total assets $ 2,600.4 $ 2,334.1
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt, including current maturities $ 98.2 $ 6.1
Accounts payable 155.4 149.6
Accrued expenses 515.9 498.4
Income taxes payable 23.0 -
Current liabilities 792.5 654.1
Long-term debt
Notes, mortgages and debentures 309.8 312.8
Deferred items
Income taxes 154.8 157.8
Postretirement and postemployment benefits 136.7 138.3
Compensation and other 32.3 28.0
Deferred items 323.8 324.1
Common shareholders' equity
Common stock; authorized: 200,000,000 shares,
$.75 par value; issued: 102,537,692 shares 76.9 76.9
Additional paid-in capital 301.7 299.4
Retained earnings 934.6 814.8
Treasury stock, at cost: 4,190,976 shares at September
30, 1996 and 4,633,036 shares at December 31, 1995 (77.6) (85.0)
Minimum pension liability adjustment (3.4) (3.4)
Unearned portion of restricted stock
issued for future services and held in trust (7.6) (6.3)
Cumulative translation adjustments 12.2 13.7
Unamortized ESOP expense (62.5) (67.0)
Common shareholders' equity 1,174.3 1,043.1
Total liabilities and shareholders' equity $ 2,600.4 $ 2,334.1
The notes are an integral part of these consolidated statements.
</TABLE>
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<TABLE>
Brunswick Corporation
Consolidated Statements Of Cash Flows
for the nine months ended September 30
(dollars in millions)
1996 1995
(unaudited)
Cash flows from operating activities
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Net earnings $ 156.7 $ 105.0
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization of continuing
operations 88.0 87.8
Changes in noncash current assets and current
liabilities of continuing operations (120.1) (129.7)
Increase in deferred items 1.0 45.5
Stock issued for employee benefit plans 8.4 8.1
Dividends received from equity investments 24.4 4.8
Other, net (3.6) 4.2
Restructuring charge - 40.0
Estimated loss on discontinued operations - 11.5
Net operating cash flow of discontinued operations (1.4) 1.6
Net cash provided by operating activities 153.4 178.8
Cash flows from investing activities
Payments for businesses acquired (354.4) (12.5)
Capital expenditures (106.5) (81.3)
Proceeds from businesses disposed 28.4 22.0
Investment in marketable securities 11.2 11.8
Payments advanced for long-term marine engine
supply arrangements (42.8) -
Other, net (9.3) (4.5)
Net investing activities of discontinued operations (0.5) (4.7)
Net cash used for investing activities (473.9) (69.2)
Cash flows from financing activities
Net proceeds from commercial paper borrowings 88.8 -
Cash dividends paid (36.9) (35.9)
Other, net 0.3 (5.4)
Net cash used for financing activities 52.2 (41.3)
Net decrease in cash and cash equivalents (268.3) 68.3
Cash and cash equivalents at January 1 344.3 185.2
Cash and cash equivalents at September 30 $ 76.0 $ 253.5
Supplemental cash flow disclosures:
Interest paid $ 33.7 $ 19.7
Income taxes paid, net 54.5 40.3
The notes are an integral part of these consolidated statements.
</TABLE>
<PAGE>
Brunswick Corporation
Notes to Consolidated Financial Statements
September 30, 1996, December 31, 1995 and September 30, 1995
(unaudited)
Note 1 - Accounting policies
This financial data has been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission.
Accordingly, certain information and disclosures, normally
included in financial statements and footnotes prepared in
accordance with generally accepted accounting principles, have
been condensed or omitted. Brunswick Corporation (the "Company")
believes that the disclosures in these statements are adequate to
make the information presented not misleading. The results of
operations and net assets of the Company's divested freshwater
fishing boat operations that comprised substantially all of the
assets of the Fishing Boats Division have been reported as
discontinued operations. Previously reported amounts have been
restated to conform with this presentation.
These financial statements should be read in conjunction with,
and have been prepared in conformity with, the accounting
principles reflected in the consolidated financial statements and
related notes included in the Company's Annual Report on Form
10-K for the year ended December 31, 1995. These interim results
include, in the opinion of the Company, all normal and recurring
adjustments necessary to present fairly the results of operations
for the quarter and nine-month periods ended September 30, 1996
and 1995. The 1996 interim results are not necessarily
indicative of the results which may be expected for the remainder
of the year.
Note 2 - Earnings per common share
Earnings per common share are based on the weighted average
number of common and common equivalent shares outstanding during
each period. Such average shares were 98.7 million and 96.1
million for the quarters ended September 30, 1996 and 1995,
respectively, and 98.7 and 96.0 million for the nine-month
periods ended September 30, 1996 and 1995, respectively.
Note 3 - Inventories
Inventories, of which approximately 45% were valued using the
LIFO method, consisted of the following at September 30, 1996 and
December 31, 1995 (in millions):
September 30, December 31,
1996 1995
Finished goods $251.0 $195.5
Work in process 132.2 127.7
Raw materials 104.9 63.4
Inventories $488.1 $386.6
<PAGE>
Note 4 - Acquisitions
On March 8, 1996, the Company acquired the Nelson/Weather-Rite
camping division of Roadmaster Industries, Inc. for $120.0
million in cash and the assumption of certain liabilities. The
Company acquired assets, including goodwill that will be
amortized using the straight-line method over 40 years. This
operation has been named the American Camper Division and is
part of the Brunswick Outdoor Recreation Group of the Recreation
segment.
On May 31, 1996, the Company acquired the assets related to the
Boston Whaler line of boats from Meridian Sports for $27.4
million in cash and the assumption of certain liabilities. The
Company acquired assets, including goodwill that will be
amortized using the straight-line method over 40 years. This
operation is a part of the Sea Ray Division of the Marine
segment.
On September 6, 1996, the Company acquired the assets related to
the Roadmaster bicycle business and other outdoor products,
including the Flexible Flyer line of sleds and wagons, from
Roadmaster Industries, Inc. for $197.7 million in cash and the
assumption of certain liabilities. The Company acquired assets,
including goodwill that will be amortized using the straight-
line method over 40 years. This operation has been included in
the Brunswick Outdoor Recreation Group of the Recreation segment.
These acquisitions were accounted for as purchases and have been
recorded using preliminary valuations of the opening balance
sheets. Operating results are included in the Company's results
of operations since the dates of acquisition.
Note 5 - Discontinued Operations
On April 1, 1996, the Company announced its intention to divest
its freshwater fishing boat operations, which comprised
substantially all of the assets and certain liabilities of the
Fishing Boat Division in the Marine segment and included the
Starcraft, Fisher, MonArk, Spectrum, Astro and Procraft brands.
Certain assets and liabilities of discontinued operations which
are being retained by the Company are reflected in the Company's
continuing operations in 1996. In the second quarter, the
Company completed negotiations for the disposition of these
operations and in the third quarter has completed these
transactions. These disposition transactions did not have a
significant effect upon the Company's consolidated results of
operations. The net sales of the businesses divested for the
quarter ended September 30, 1995 were $46.9 million and for the
nine-month periods ended September 30, 1996 and 1995 were $80.4
million and $147.7 million, respectively. Intercompany sales
between the continued and discontinued operations that were
previously eliminated in consolidation have been included in the
results of continuing operations.
<PAGE>
Note 6 - Dispositions
In the second quarter of 1995, the Company announced its
intention to divest its golf club shaft business and the Circus
World Pizza operations in the Recreation segment and recorded a
$25.8 million restructuring charge to cover estimated losses on
the dispositions. The Circus World divestiture was completed in
1995 and the sale of the golf club shaft business was completed
in the second quarter of 1996. The losses associated with these
transactions, including the estimated exposure on retained
liabilities, were adequately covered by the 1995 restructuring
charge. The net sales and operating earnings(losses)(excluding
divestiture provisions) of the businesses divested for the
quarter and nine-month periods ended September 30, 1996 and 1995
were as follows (in millions):
Quarter Nine months
1996 1995 1996 1995
Net sales $ 0.0 $ 4.6 $ 9.9 $16.4
Operating earnings(losses) $ 0.0 $(1.9) $ 1.4 $(5.8)
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Note 7 - Consolidated common shareholders' equity
Minimum
Addt'l Pension Unearned Cum. Unamort.
Common stock Paid-in Retained Treasury Stock Liab. Restricted Trans. ESOP
(in millions) Shares Amount Capital Earnings Shares Amount Adjmt Stock Adjmts Expense
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Balance, January 1, 1996 102.5 $76.9 $299.4 $814.8 (4.6) ($85.0) ($3.4) ($6.3) $13.7 ($67.0)
Net earnings - - - 156.7 - - - - - -
Dividends declared ($.375 per
common share) - - - (36.9) - - - - - -
Compensation plans and other - - 2.3 - 0.4 7.4 - (1.3) - -
Deferred compensation-ESOP - - - - - - - - - 4.5
Currency translation - - - - - - - - (1.5) -
Balance, September 30, 1996 102.5 $76.9 $301.7 $934.6 (4.2) ($77.6) ($3.4) ($7.6) $12.2 ($62.5)
</TABLE>
Note 8 - Debt
Short-term and long-term debt at September 30, 1996 and
December 31, 1995, consisted of the following (in millions):
September 30, December 31,
1996 1995
Short-term debt
Commercial paper, 5.57% to 5.62%, $ 88.8 $ -
due 10/8/96 - 11/22/96
Notes payable 3.3 .3
Current maturities 6.1 5.8
Short-term debt $ 98.2 $ 6.1
Long-term debt
Notes, 8.125%, due 1997 (net of
discount of $0.1) $100.0 $ 99.9
Mortgage notes and other, 3% to
10%, payable through 2001 26.8 26.8
Debentures, 7.375%, due 2023,
(net of discount of $0.8 and $0.9) 124.2 124.1
Guaranteed ESOP debt, 8.13%,
payable through 2004 64.9 67.8
315.9 318.6
Current maturities ( 6.1) (5.8)
Long-term debt $309.8 $312.8
<PAGE>
As of September 30, 1996, the Company and 17 banks had a
long-term revolving credit agreement for $400 million with a
termination date of December 31, 2000. Under terms of the
amended agreement, the Company has multiple borrowing options,
including borrowings at a corporate base rate, as announced by
The First National Bank of Chicago, or a rate tied to the
Eurodollar rate. Currently, the Company must pay a facility fee
of 0.11% on the unused portion.
Under the agreement, the Company is subject to interest coverage,
net worth and leverage tests as well as a restriction on secured
debt, as defined. Under the interest coverage test, the Company
is required to maintain a ratio of consolidated income before
interest and taxes, as defined, to consolidated interest expense
of not less than 2.0 to 1.0 on a cumulative 12-month basis. The
ratio, on a cumulative 12-month basis, was 9.2 to 1.0 at
September 30, 1996. The leverage ratio of consolidated total
debt to capitalization, as defined, may not exceed 0.55 to 1.00
and at September 30, 1996, this ratio was 0.26 to 1.00.
The Company is also required to maintain shareholders' equity of
at least $839.6 million, with the required level of shareholders'
equity at December 31 of each year being increased by 50% of net
earnings for that year. The Company has complied with this
limitation and the secured debt limitation as of September 30,
1996. There were no borrowings under the agreement at
September 30, 1996.
The Company has $100.0 million of 10-year notes that mature on
April 1, 1997, which have been classified as long-term debt. This
classification is based on the Company's ability to refinance
this debt with another long-term instrument, which the Company
intends to do prior to maturity.
In the third quarter of 1996, the Company filed a universal shelf
registration with the Securities and Exchange Commission for an
aggregate offering price of up to $600 million in various equity
and/or debt securities.
Note 9 - Litigation
There have been no significant changes in the status of the items
set forth in Note 13: Litigation in the 1995 Annual Report to
Shareholders and also the 1995 Annual Report on Form 10-K.
<PAGE>
Note 10 - Segment Data
The following table sets forth net sales and operating earnings
of each of the Company's industry segments for the quarter and
nine-month periods ended September 30, 1996 and 1995 (in
millions):
Quarter ended September 30,
1996 1995
Net Operating Net Operating
Sales Earnings Sales Earnings
Marine $ 566.1 $ 65.0 $ 517.6 $ 54.7
Recreation 197.5 12.6 177.0 10.3
Segments 763.6 77.6 694.6 65.0
Corporate - (11.6) - (11.4)
Consolidated $ 763.6 $ 66.0 $ 694.6 $ 53.6
Nine months ended September 30,
1996 1995
Net Operating Net Operating
Sales Earnings Sales Earnings
Marine $1,751.5 $ 228.3 $1,671.4 $ 203.4
Recreation 609.3 58.1 569.4 26.5
Segments 2,360.8 286.4 2,240.8 229.9
Corporate - (30.5) - (47.0)
Consolidated $2,360.8 $ 255.9 $2,240.8 $ 182.9
Operating earnings of the Recreation segment for the nine months
ended September 30, 1995 include a $25.8 million restructuring
charge for losses on the divestitures of the golf club shaft
business and Circus World Pizza operations.
Corporate operating expenses for the nine months ended
September 30, 1995 include $14.2 million in management transition
expenses and costs associated with an early retirement and
selective separation program at the Company's corporate office.
<PAGE>
Management's Discussion and Analysis
Cash Flow, Liquidity and Capital Resources
Management assesses the Company's liquidity in terms of its
overall ability to generate cash to fund its operating and
investing activities. Of particular importance in the management
of liquidity are cash flows generated from operating activities;
cash used to fund capital expenditures, acquisitions and other
strategic activities; cash needed to service existing short- and
long-term debt and pay dividends; and the Company's ability to
secure long-term capital at reasonable terms.
For the nine months ended September 30, 1996, cash and cash
equivalents decreased $268.3 million to $76.0 million. The
decline was primarily due to the Company's investing activities,
which included $354.4 million for acquisitions, $106.5 million
for capital expenditures and $42.8 million advanced to boat
manufacturers in connection with long-term engine supply
contracts. These activities were funded with available cash
balances, cash generated from operating activities and commercial
paper borrowings.
Cash generated from operating activities in the first nine months
of 1996 totalled $153.4 million versus $178.8 million in 1995.
The primary components of cash generated from operating
activities include the Company s net earnings; the level of
noncash revenues and expenses included in net earnings; the
timing of cash flows relating to operating expenses, sales, and
income taxes; and the management of inventory levels. The
decrease between periods reflects the impact of higher levels of
inventories and accounts receivable, primarily resulting from
increased sales volume. During the first nine months of 1996,
the Company's net earnings increased to $156.7 million from
$105.0 million in 1995. Net earnings in 1995 include a $40.0
million pretax ($24.4 million after-tax) restructuring charge and
a $7.0 million after-tax loss ($11.0 million pre-tax) on the
disposition of discontinued operations recorded in the second
quarter.
During the first nine months of 1996, the Company invested $106.5
million in capital expenditures, an increase of $25.2 million
from 1995 levels. This increase reflects the Company's continued
emphasis on investing to achieve improved production efficiencies
and product quality, supporting new product development
activities and maintaining existing production capacity.
Management anticipates that 1996 capital expenditures may exceed
$160 million.
The Company also spent $354.4 million on acquisitions in the
first nine months of 1996, including the purchase of the
Roadmaster bicycle business for $197.7 million and American
Camper, formerly the Nelson/Weather-Rite camping division, for
$120.0 million from Roadmaster Industries, Inc. The Boston
Whaler line of boats was purchased from Meridian Sports for $27.4
million. Management continues to evaluate acquisition
opportunities as it continues to reposition the Company's sales
and profit mix towards a higher contribution from consumer
recreation products that offer more stable growth opportunities.
<PAGE>
Total debt at September 30, 1996, was $408.0 million versus
$318.9 million at December 31, 1995, with debt-to-capitalization
ratios at those dates of 25.8% and 23.4%, respectively. The
Company issued commercial paper during the third quarter of 1996
and $88.8 million was outstanding at September 30, 1996. The
Company s debt structure at September 30, 1996, included $100.0
million of 8.125% notes due April 1, 1997, which Management
intends to refinance prior to maturity with long-term debt.
The continued increased levels of capital expenditures and normal
operating cash requirements will be funded through existing cash
balances, cash generated from operating activities and short-term
commercial paper borrowing, if necessary. Additional significant
acquisition activity or changes in business conditions would
require the Company to increase its borrowing levels in the near-
term. The Company can provide the necessary liquidity from
various sources, including a revolving credit agreement,
commercial paper offerings, existing cash balances, and cash
generated from operating activities. The Company continues to
maintain a $400 million long-term line of credit with a group of
banks. For an explanation of the agreement and a discussion of
the specific covenant restrictions, see Note 8 - Debt. In
addition, the Company filed a universal shelf registration in the
third quarter of 1996 with the Securities and Exchange Commission
for the issuance of up to $600 million in various equity and/or
debt securities.
<PAGE>
Results of Operations - Third Quarter and the First Nine Months
of 1996 versus 1995
Consolidated
In the third quarter of 1996, consolidated sales increased 10% to
$763.6 million from $694.6 million, while year-to-date sales
increased 5% to $2,360.8 million from $2,240.8 million a year
ago. In both 1996 periods, the Company benefitted from stronger
sales of its large boat units and from the contribution of the
newly acquired American Camper and Roadmaster bicycle businesses.
The Company's results for the third quarter of 1995 and nine
months of 1996 and 1995 have been restated to account for the
recently divested freshwater fishing boat operations as
discontinued operations.
International sales for the third quarter decreased 6% to $169.8
million in 1996 from $181.3 million in 1995. In the year-to-date
periods, 1996 international sales declined to $570.1 million from
$606.8 million in 1995. The reductions in both periods were
primarily due to the continued decline in the sales of bowling
capital equipment to the mature Korean and Taiwanese markets,
where new center development has substantially slowed, partially
offset by rapidly expanding sales volumes in China and other East
Asian countries, where volumes are not yet adequate to compensate
for the decline in the Taiwanese and Korean markets. Based on
current market conditions, management expects this trend in
bowling capital equipment sales to continue throughout 1996.
The Company's consolidated operating earnings in the third
quarter increased 23% to $66.0 million in 1996 compared to $53.6
million in 1995, while nine-month operating earnings levels
rose 40% to $255.9 million in 1996 from $182.9 million in 1995.
The increase in the current year-to-date period versus prior
year's was partially attributable to a $40.0 million second
quarter charge for restructuring and management transition
expenses recorded in 1995. Absent this charge, nine-month
operating earnings would have increased 15% to $255.9 million in
1996 from $222.9 million in 1995. The gain for both periods
reflects the impact of higher sales levels and improved Marine
and Recreation segment operating margins.
Interest expense increased in the third quarter to $8.3 million
in 1996 from $8.0 million in 1995, while year-to-date interest
expense increased to $24.3 million in 1996 from $23.9 million in
1995 due to the issuance of short-term commercial paper in
September 1996. Interest income and other items, net declined in
the quarter to $3.2 million in 1996 from $8.2 million in 1995,
reflecting lower interest income due to decreased cash balances
and an unfavorable swing in the accounting recognition of foreign
currency transactions between periods. In the nine-month period,
Interest income and other items, net increased to $15.2 million
in 1996, from $14.7 million in 1995, on stronger 1996 earnings
from the Company's marine and bowling joint ventures. These
gains were partially offset by an unfavorable swing in the
accounting recognition of foreign currency transactions between
periods and lower interest income.
<PAGE>
The estimated effective tax rate for the full year 1996 was 36.5%
at September 1996 versus 36.0% at September 1995. In the third
quarter of 1996, the estimated effective tax rate for 1996 was
reduced from 37.5%, reflecting the reinstatement of the research
and development tax credit by the Congress.
Marine Segment
In the third quarter, sales of the Company's Marine segment
increased to $566.1 million in 1996, representing a 9%
improvement over 1995 levels. In the nine-month periods, sales
of the Marine segment were 5% ahead of 1995 levels, increasing to
$1,751.5 million in 1996 from $1,671.4 million. The Company
recorded sales gains in both periods in this segment despite the
marine industry overall having a flat year. These gains occurred
in the Sea Ray and US Marine Divisions' large boat operations, as
a result of enhanced marketing efforts, new product
introductions, recent acquisitions and a more favorable product
mix. The Mercury Marine Division reported sales slightly above
prior-year levels in the quarter and below prior-year levels in
the year-to-date period. Sales gains in stern drive engines,
which are primarily used on larger boats, were offset by a
reduction in sales of outboard engines, reflecting a slowdown in
sales of smaller boats where outboards are used, and retail
inventory reductions by dealers.
Marine segment operating earnings increased 19% in the 1996 third
quarter to $65.0 million versus $54.7 million in 1995. In the
nine-month period, Marine segment operating earnings increased
12% to $228.3 million in 1996 from 1995 levels. This performance
reflects improved sales of the Sea Ray and US Marine Divisions
discussed above, along with the favorable shift in sales mix to
larger boats. The Mercury Marine Division posted an improvement
in operating earnings in the third quarter, primarily due to a
more favorable sales mix and improved pricing and cost
management.
Recreation Segment
In the third quarter, the Recreation segment reported a sales
increase of 12% to $197.5 million in 1996 compared to $177.0
million in 1995. In the year-to-date period, Recreation segment
sales increased 7% to $609.3 million.
This segment consists of the Brunswick Outdoor Recreation Group
and the Brunswick Indoor Recreation Group. The Brunswick Outdoor
Recreation Group is comprised primarily of the Zebco, MotorGuide
and Browning fishing products units, the American Camper
operation, which was acquired as the Nelson/Weather-Rite camping
unit on March 8, 1996, and the Roadmaster bicycle business, which
was acquired on September 6, 1996. The Brunswick Indoor
Recreation Group is comprised primarily of the bowling capital
equipment and products, recreation center and billiards
businesses.
<PAGE>
The sales increases experienced in both periods are primarily due
to the contributions of the recently acquired American Camper and
Roadmaster bicycle businesses. These increases were partially
offset by a decline in the sales of the fishing product units,
which were adversely affected by retail inventory adjustments.
The Brunswick Indoor Recreation Group experienced a decline in
sales primarily due to the previously mentioned reduction in
shipments of bowling capital equipment to international markets.
The Recreation segment third quarter operating earnings increased
22% to $12.6 million in 1996 from $10.3 million in 1995, while
the operating earnings for the nine-month period improved to
$58.1 million in 1996 from $26.5 million in 1995. A portion
of the year-to-date variation is due to a $25.8 million
restructuring charge included in the Recreation segment operating
earnings in the second quarter of 1995. Absent this charge,
operating earnings year-to-date 1996 would have been 11% higher
than prior-year levels. The improvement in operating earnings in
both periods reflects the previously discussed increase in sales
levels from the Outdoor Recreation Group along with stringent
cost controls. The segment also benefitted from the divestiture
of the Circus World and golf shaft businesses, which operated at
a loss in 1995.
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
none
(b) Reports on Form 8-K.
The Company filed no reports on Form 8-K during
the three months ended September 30, 1996.
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
BRUNSWICK CORPORATION
November 12, 1996 By:/s/ Peter B. Hamilton
Peter B. Hamilton, Senior
Vice President and Chief
Financial Officer*
*Mr. Hamilton is signing this report both as a duly authorized
officer and as the principal financial officer.
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0
0
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