The company also produces Life Fitness, Hammer Strength, Cybex and SCIFIT fitness equipment, InMovement products and services for productive well-being, and Brunswick billiards tables, accessories and game room furniture.
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Brunswick Corporation designs, manufactures, and markets recreation products worldwide. The companys Marine Engine segment offers outboard engines, sterndrive propulsion systems, and inboard engines; marine electronics and control integration systems, steering systems, instruments, controls, propellers, trolling motors, fuel systems, service parts, and marine lubricants; and integrated, high-speed diesel propulsion systems to the recreational and commercial marine markets. It serves independent boat builders and end users, as well as local, state, and foreign governments through marine dealers and distributors, specialty marine retailers, and marine service centers under the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, Mercury Sport Jet, Mercury Jet Drive, MotorGuide, Sea Pro, Axius, Zeus, Quicksilver, Mercury Precision Parts, Mercury Propellers, Attwood, Garelick, Whale, Land 'N' Sea, Kellogg Marine Supply, Diversified Marine Products, Bell Recreational Products, BLA, Seachoice, and MotorGuide brands. The companys Boat segment offers fiberglass pleasure boats; luxury yachts, yachts, and sport yachts; offshore fishing boats; aluminum and fiberglass fishing boats; pontoon boats; and deck and inflatable boats under the Sea Ray L-Class, Bayliner, Meridian, Boston Whaler, Lund, Crestliner, Cypress Cay, Harris, Lowe, Princecraft, Master Dealer, Protector, Quicksilver, Rayglass, and Uttern brands. Its Fitness segment provides cardiovascular fitness equipment; and strength-training equipment, as well as engages in the billiards business. This segment serves health clubs, corporations, schools and universities, hotels, professional sports teams, retirement and assisted living facilities, and the military and governmental agencies under the Life Fitness, Hammer Strength, SCIFIT, Cybex, Air Hockey, Brunswick, Contender, Flex Deck, Gold Crown, InMovement, and Lifecycle brands. The company was founded in 1845 and is headquartered in Lake Forest, Illinois.
(Summary) (Company) (Chart)
8 March 2016
1yr Target $58.20
Payout Ratio 25.00%
1yr Cap Gain 36.23%
1yr Tot Return 37.63%
EPS (ttm) $2.40
EPS next yr $3.98
EPS next 5yr 16.35%
1yr Price Support $65.07
Market Cap $4.10 Bil
Revenues $4.11 Bil
Earnings $227.40 Mil
Profit Margin 5.52%
1yr EarnGR -0.78%
3yr EarnGR 167.12%
5yr EarnGR ---
1yr DivGR 22.22%
3yr DivGR 175.51%
5yr DivGR 140.62
Quick Ratio 1.40
Current Ratio 2.20
The Company's Varied History
The J. M. Brunswick Manufacturing Company opened for business on September 15, 1845, in Cincinnati, Ohio. Mr. Brunswick intended his company to be mainly in the business of making carriages, but soon after opening his machine shop, he became fascinated with billiards. It occurred to him that making billiard tables would be more lucrative since the better tables then in use in the US were expensive and imported from England. Brunswick billiard tables were a commercial success and in 1848 the business expanded rapidly throughout Chicago, IL.
In 1874, the Brunswick company merged with competitor Great Western Billiard Manufactory owned by Julius Balke to become the J. M. Brunswick & Balke Company. It was incorporated in 1879 with a capital stock of $275,000. That same year the company merged with another competitor, H. W. Collender Company of New York to acquire Collender's patented billiard cushions. In 1884, the partners formed the Brunswick-Balke-Collender Company with $1.5M in capital. The company grew rapidly and expanded into making a number of other products - large ornate neo-classical style bars for saloons, bowling balls, pins, and equipment.
In the early 20th century, Brunswick expanded the product line to include such diverse products as toilet seats, automobile tires, and phonographs. In the late 1910s, they introduced a popular line of disc phonograph records, under the name Brunswick Records. In 1930, Brunswick sold the control of the record company to Warner Brothers and came out with a line of refrigerators. During World War II, Brunswick-Balke-Collender made small target-drone aircraft for the U.S. military. Then after the war, Brunswick introduced a line of school furniture.
In 1955, the Brunswick "Model A" Mechanical Pinsetter, a fully automated bowling alley pinsetter premiered, for handling bowling pins for the sport of tenpins, in competition with American Machine and Foundry (AMF). The decade also saw the introduction of a line of golf equipment to compete with AMF in the leisure products and sporting goods markets.
The Brunswick-Balke-Collender Company officially changed its name to the Brunswick Corporation on April 10, 1960, and the following year the company reported sales of $422 million. Brunswick next acquired Mercury Marine in 1961. In the 1970s, Brunswick introduced the automatic scorer, which electronically tallied the score instead of the bowler doing it by hand.
In the 1980s, Brunswick became a major maker of yachts and pleasure boats, whose brands include Bayliner, Boston Whaler, Maxum, Sea Ray, and Trophy.
In 1997, Brunswick purchased the Roadmaster bicycle division, one of the last U.S. manufacturers of low-cost, mass-market bicycles but it quickly became apparent that cheap Asian imports from China were stealing the market. In 1999 Brunswick sold its Roadmaster bicycle division and brand to Pacific Cycle.
On Nov 30, 2001, Brunswick Corporation completed the acquisition of Hatteras Yachts, Inc. from Genmar Industries, Inc. for approximately $80 million in cash. Brunswick Corporation still manufactures sporting and fitness equipment (Life Fitness, Hammer Strength, Parabody) in addition to boats (Sea Ray, Bayliner, Maxum, etc.) and marine engines under the Mercury Marine brand name.
Brunswick reports that in the past five years, their international sales have grown at twice the rate of domestic sales. It has established regional headquarters in Verviers, Belgium, Monterrey, Dandenong, Australia, and Dubai to better serve its customers by designing, engineering, manufacturing and distributing products based on local needs, using local talent.
On July 17, 2014, Brunswick announced its intention to leave the bowling business by the end of 2014. The company disclosed that it had agreed to sell the bowling center business, which brought in $187 million in revenue in the prior year, to competitor Bowlmor AMF for $270 million. The sale of the bowling center business to Bowlmor AMF was completed in Sep 2014.
Brunswick completed its exit from the bowling business in May 2015 with the sale of the bowling equipment and products division to BlueArc Capital Management, a private investment firm based in Atlanta, GA.
A company that evolves as much as Brunswick has is always difficult to analyze because their fundamentals are changing along with their businesses. But this company has survived for over 170 years and I don't think they're going away any time soon. I like how they have been able to adapt to different conditions and different economies. They're also international so they're not dependent on just one country for their sales.
With their current emphasis on the fitness and the boating segments of the economy, I think they've tapped into segments that will flourish in almost any economy. I intend to start a small position in this company and then allow that position to grow naturally through dividend reinvestment, sale of stock options, and purchases on the open market when I perceive the price to be below fair value.
Based on the numbers above, this company appears to have a nice one year return on invested capital and a growing dividend. And those are the things I'm always looking for.