Brunswick Corporation's sales advanced by 7 percent to $3,838.7 million in 2014, driven by the existing business as well as acquisitions. After abundant investments in the last quarters, the performance included increases of 8 percent in U.S. sales and 4 percent in international sales. .
The sales data refer to the continuing operations of the group. As reported, in July Brunswick announced that it had agreed to sell its retail bowling business and said it intended to divest its bowling products business. While the group's billiards division was integrated into its fitness category, both of the bowling units have been reported as discontinued businesses.
The fitness segment, which includes Life Fitness and Hammer Strength, was among the growing segments in the Brunswick group, which also comprises the boat and marine segments. The revenues of the fitness division reached $769.3 million for the year, up by 7 percent. The same increase applied for the division's operating earnings, which reached $115.3 million.
The company's gross margin inched up by 0.6 percentage points to 27.0 percent for 2014. Brunswick ended the year with operating earnings up by 17 percent to $328.5 million, which included a $27.9 million pension settlement charge related to lump sum payouts and $4.2 million of restructuring, exit and impairment charges – against $16.5 million of such charges in 2013. Brunswick's net earnings amounted to $194.9 million, down from $756.8 million in 2013, when the earnings were inflated by the reversal of deferred tax valuation allowance reserves.
The fourth quarter showed a 14 percent increase in sales to $938.6 million. The Fitness segment lifted its turnover by 8 percent to $235.0 million for the quarter. Brunswick pushed up its sales to U.S. health clubs, hospitality, education and government customers. International sales, which make up about 47 percent of Brunswick's fitness sales, increased by 10 percent. Operating earnings for the division reached $40.8 million, up 10 percent.
The group's gross margin climbed by 0.9 percentage points and operating earnings landed at $14.6 million for the quarter, after a $27.9 million pension settlement charge related to lump sum payouts, among other exceptional charges. The company suffered a net loss of $2.3 million for the quarter, compared with net earnings of $578.7 million for the same quarter the previous year.
On the back of its investments and the resilience of the commercial fitness market, among other factors, Brunswick predicts that sales will expand in the range of 6 to 8 percent this year. Its 2015 plan assumes a slight improvement in gross margin and solid gains in operating margin.
Brunswick estimates that it should achieve the financial targets outlined in its 2016 plan. Sales and earnings are both expected to increase in 2015 and beyond, benefitting from product launches as well as increases in production rates and capacity.
