Business Context and Reporting Period
Company: Brunswick Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: October 25, 2018
Reporting Period: Third Quarter 2018
This filing announces the financial results for the third quarter of 2018. The detailed earnings news release is incorporated by reference as Exhibit 99.1. The filing does not contain specific numerical financial data within the text provided; it primarily defines the non-GAAP measures used in the referenced news release.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. It defines the following non-GAAP measures used in the associated news release:
- Adjusted Diluted EPS: Excludes impacts from pension settlements, restructuring, impairment, Fitness business separation, product field campaigns, equity method investment impairments, debt extinguishment, special tax items, Sea Ray Sport Yacht operations, acquisition costs, and purchase accounting amortization.
- Adjusted Operating Earnings: Excludes restructuring, exit, integration, impairment, purchase accounting amortization, Fitness separation, Sea Ray Sport Yacht operations, acquisition costs, and product field campaigns.
- Adjusted Pretax Earnings: Excludes pension settlements, restructuring, impairment, Fitness separation, Sea Ray Sport Yacht operations, acquisition costs, purchase accounting amortization, product field campaigns, equity method investment impairments, debt extinguishment, and other applicable charges.
- Free Cash Flow: Defined as cash flow from operating and investing activities, excluding acquisitions, investments, marketable securities, Fitness separation costs (net of tax), and Sport Yacht operations (net of tax).
Material Changes and Comparisons
The filing text does not provide specific numerical comparisons to prior periods. It notes that the company may use constant currency reporting to reflect changes in net sales by translating foreign currency transactions using prior year exchange rates. This method is intended to better reflect underlying business trends by excluding the impact of foreign currency exchange rate fluctuations.
Guidance, Outlook, and Risks
Guidance: Brunswick does not provide forward-looking guidance for certain financial measures on a GAAP basis. Management states it is unable to predict certain items without unreasonable efforts, including pension settlement charges, restructuring, exit, integration, impairment charges, special tax items, Fitness business separation costs, acquisition-related costs, and other unusual adjustments.
Management Commentary: Management believes the defined non-GAAP measures are useful for investors to view performance using the same tools as management and to better evaluate ongoing business performance and comparability against prior periods.
Risks and Contingencies: The filing highlights ongoing adjustments related to the planned Fitness business separation and Sea Ray Sport Yacht and Yacht operations as significant items excluded from adjusted metrics.
Investor Verification Checklist
- Review Exhibit 99.1 (News Release dated October 25, 2018) for specific numerical values regarding Q3 2018 revenue, earnings, and cash flow.
- Verify the specific dollar amounts excluded from GAAP measures to calculate the impact of the Fitness business separation and Sea Ray Sport Yacht operations.
- Confirm the constant currency exchange rates used to assess the true organic growth in net sales.
- Check for any updates on the timeline or costs associated with the planned Fitness business separation.