Brunswick(BC)2025-02-14 19:23Financial Performance - Net sales decreased by 18.2% in 2024 compared to 2023, totaling 6,401.4 million[196] - Gross margin fell to 25.8% in 2024, a decrease of 210 basis points from 27.9% in 2023[196] - Operating earnings dropped by 57.6% to 734.9 million in 2023[196] - Net earnings from continuing operations decreased by 65.5% to 432.6 million in 2023[196] - Diluted earnings per common share from continuing operations fell to 6.13 in 2023[196] Segment Performance - Propulsion segment net sales decreased by 25.0% to 2,763.8 million in 2023, primarily due to lower OEM production rates and engine orders[209] - Adjusted operating earnings for the Propulsion segment fell by 49.4% to 504.2 million in 2023[209] - Engine P&A segment net sales decreased by 3.3% to 224.7 million in 2024, compared to 800.2 million in 2024, driven by reduced sales to marine OEMs[216] - Adjusted operating earnings for the Navico Group segment fell by 42.3% to 91.3 million in 2023[216] - Boat segment net sales decreased by 21.9% to 74.0 million in 2024, compared to 121.7 million in 2024 from 24.0 million[202] - Selling, general and administrative expenses as a percentage of net sales increased by 160 basis points in 2024 compared to 2023[201] Cash Flow and Liquidity - Free cash flow decreased to 473.4 million in 2023, primarily due to lower net earnings[226] - Net cash provided by operating activities of continuing operations was 745.2 million in 2023, reflecting lower net earnings[228] - Total cash, cash equivalents, and marketable securities decreased to 468.6 million in 2023, representing a decline of 42.4%[233] - Total liquidity as of December 31, 2024, was 1,210.5 million in 2023[233] Debt and Financing - The company plans to reduce debt by 160 million[238] - Total debt as of December 31, 2024, was 2,430.4 million in 2023[233] - The debt-to-capitalization ratio was 55% as of December 31, 2024, compared to 54% in 2023[233] - Net cash used for financing activities was 613.2 million in long-term debt payments and 997.0 million available under its Credit Facility as of December 31, 2024, compared to 80.0 million impairment of goodwill for the Navico Group reporting unit during the year ended December 31, 2024[254] - The company recorded impairment charges of 16.6 million in 2023 (including 17.4 million in 2022 related to capitalized software intangible assets[257] Foreign Currency and Risk Management - Approximately 25% of annual net sales are transacted in currencies other than the U.S. dollar, with significant exposure to Euros, Canadian dollars, Australian dollars, and Brazilian real[193] - The estimated reduction in fair market value from a 10% adverse change in foreign currency rates is 91.7 million for 2023[264] - The company uses foreign currency forward and option contracts to manage exposure to foreign exchange rate risks, primarily related to the Euro, Canadian dollar, Australian dollar, and Brazilian Real[261] - The company manages foreign currency exposure through derivative financial instruments to offset gains or losses on underlying assets or liabilities[261] Interest Rate Management - Fixed-to-floating interest rate swaps are utilized to convert a portion of long-term debt from fixed to floating rate debt, aiming to offset changes in fair value due to benchmark interest rate fluctuations[262] - The company does not engage in financial instruments for trading or speculative purposes, focusing instead on hedging transactions to mitigate market risks[260] Accounting and Reporting - Recent accounting pronouncements have been adopted during the year ended December 31, 2024, with further details available in the consolidated financial statements[259] - Impairment tests for indefinite-lived intangible assets are conducted at least annually, comparing fair value with carrying amount[257] - The company employs models to evaluate the sensitivity of financial instruments to market risk, assuming instantaneous, parallel shifts in exchange rates[263]