Brunswick (BC)

Looking Ahead

“At the beginning of the year we based our planning on the assumption that marine retail demand would be up in the mid-single digits.  Although there have been puts and takes in various geographical areas and market segments, results through the first half of 2005 continue to support that assumption,” Buckley said.  “We are also seeing positive trends in pipeline inventories with 23 weeks of supply for boats and 20 weeks of supply of engines in the channel, down eight weeks and nine weeks, respectively, from the end of March.  This reflects the strong demand at retail we saw in the second quarter and our dealers’ expectations for continued growth at retail for the remainder of the year.”

“While keeping in mind the impact of underlying economic and stock market conditions, we expect to report another record year for Brunswick,” Buckley said.  “Based on our performance in the second quarter and outlook for the second half, we are raising our estimate for the year to $3.62 to $3.72 per diluted share, which includes the $0.32 gain on the stock sale.  This compares with $2.77 per diluted share for 2004.  This would imply earnings for the second half in the range of $1.51 to $1.61 per diluted share, which we believe will be more or less evenly divided between the third and fourth quarters.  The wild card is the timing of planned investment spending, which could result in a few pennies shifting between the two quarters.”

Looking Ahead

                “We continue to be very encouraged by the trends we are seeing in the marine market, especially as we enter the spring selling season,” commented Buckley.  “Our marine pipeline inventories are at 31 weeks of supply for boats and 29 weeks of supply for engines, up three weeks and five weeks, respectively from a year ago, representing a return to more normal levels.  The pipeline build is due to a number of factors, including higher dealer inventories in international markets in response to strong demand and the introduction of new boat models both here and abroad.  Also keep in mind that retail sales in the first quarter of 2004 were exceptionally high, resulting in a rapid draining of pipeline inventories to almost unprecedented low levels at this time last year.  The current level of inventories represents our dealers’ expectations for growth in retail demand this year.  In addition, a healthier pipeline will help us avoid the shortage of popular new models that we experienced in some categories last year.”

                “While always being cognizant of the influence of underlying economic and stock market conditions, we remain on track for another very good year,” Buckley said.