Brunswick Corporation

10/30/2025 | Press release | Distributed by Public on 10/30/2025 13:02

Quarterly Report for Quarter Ending September 27, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in Management's Discussion and Analysis of Financial Condition and Results of Operations of Brunswick Corporation (the Company, we, us, our) are forward-looking statements. Forward-looking statements are based on current expectations, estimates, and projections about our business and by their nature address matters that are, to different degrees, uncertain. Actual results may differ materially from expectations and projections as of the date of this filing due to various risks and uncertainties. For additional information regarding forward-looking statements, refer to Forward-Looking Statements below.
Certain statements in Management's Discussion and Analysis are based on non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A "non-GAAP financial measure" is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. For example, the discussion of our cash flows includes an analysis of free cash flows and total liquidity; the discussion of our net sales includes net sales on a constant currency basis; the discussion of our net sales includes net sales excluding acquisitions; and the discussion of our earningsincludes a presentation of operating earnings and operating margin excluding restructuring, exit and impairment charges, purchase accounting amortization, acquisition, integration, and IT related costs, IT security incident costs and other applicable charges and of diluted earnings per common share, as adjusted. Non-GAAP financial measures do not include operating and statistical measures.
We include non-GAAP financial measures in Management's Discussion and Analysis as management believes these measures and the information they provide are useful to investors because they permit investors to view our performance using the same tools that management uses to evaluate our ongoing business performance. In order to better align our reported results with the internal metrics management uses to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to acquisitions, among other adjustments.
We do not provide forward-looking guidance for certain financial measures on a GAAP basis because we are unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include restructuring, exit and impairment costs, special tax items, acquisition-related costs, and certain other unusual adjustments.
Known Trends or Uncertainties
We continue to monitor macroeconomic trends and uncertainties such as recently implemented tariffs along with the potential for new or modified tariffs, and related impacts to consumers, any or all of which could have a material impact on our business, financial condition and results of operations.
Acquisitions
On September 12, 2024, we acquired additional Freedom Boat Club franchise operations and territories in Southeast Florida for net cash consideration of $31.3 million. Refer to Note 4 - Acquisitions in the Notes to Condensed Consolidated Financial Statements for further information.
Overview
Net sales increased 7% during the third quarter of 2025 when compared with the third quarter of 2024, reflecting strong orders from OEMs and dealers, steady boating participation driving Engine Parts and Accessories (Engine P&A) and other aftermarket business strength and pricing action taken in recent periods. The Propulsion segment delivered significant sales growth, with revenues in each of its three business lines: outboard; sterndrive; and controls, rigging, and propellers up over the prior year as OEM order strength continued to later into the boating season. Our Engine P&A segment had another strong quarter, as healthy boater participation led to sales improvement compared to the prior year. Navico Group reported modest sales growth over the prior year quarter and operating margin was negatively affected by impairment charges. Refer to Note 8 - Goodwill and Other Intangiblesin the Notes to Condensed Consolidated Financial Statements for further information on impairments. Growth was led by strong performance in the marine electronics portfolio as we start to see the benefits of investments in new products and technology. Finally, our Boat segment revenue grew over prior year and operating margin was consistent with prior year as our premium brands continued to perform well, and our aluminum boat businesses delivered a very strong quarter. In September, we announced a strategic rationalization of our fiberglass boat manufacturing footprint, exiting our facilities in Reynosa, Mexico and Flagler Beach, Florida by the middle of 2026 and consolidating production from those facilities into existing U.S. facilities. Our international net sales increased 7 percent on a GAAP basis and increased 5 percent on a constant currency basis in the third quarter when compared with the prior year.
Net sales decreased 1 percent during the nine months ended September 27, 2025, when compared with the prior year. Our international sales decreased 1 percent on both a GAAP and constant currency basis during the nine months ended September 27, 2025, when compared with the prior year.
Operating (loss) earnings in the third quarter of 2025 were $(242.2) million and $106.4 million on a GAAP and As Adjusted basis, respectively. This compares to operating earnings during the third quarter of 2024 of $98.4 million and $125.9 million on a GAAP and As Adjusted basis, respectively. Operating earnings were down versus prior year due to the impact of restructuring and impairment charges, tariffs, and reinstatement of variable compensation, which were only partially offset by the impacts of sales increases.
Operating (loss) earnings in the nine months ended September 27, 2025 were $(82.6) million and $304.5 million on a GAAP and As Adjusted basis, respectively. This compares to operating earnings during the nine months ended September 28, 2024 of $367.3 million and $448.2 million on a GAAP and As Adjusted basis, respectively. Operating earnings were down versus prior year due to the impact of restructuring and impairment charges, tariffs, and reinstatement of variable compensation.
Matters Affecting Comparability
Changes in Foreign Currency Rates. Percentage changes in net sales expressed in constant currency reflect the impact that changes in currency exchange rates had on comparisons of net sales. To determine this information, net sales transacted in currencies other than the U.S. dollar have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period. The percentage change in net sales expressed on a constant currency basis better reflects the changes in the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Approximately 25 percent of our annual net sales are transacted in a currency other than the U.S. dollar. Our most material exposures include sales in Euros, Canadian dollars, Australian dollars, and Brazilian real.
The table below summarizes the impact of changes in currency exchange rates and the impact of acquisitions on our net sales:
Three Months Ended Nine Months Ended
Net Sales 2025 vs. 2024 Net Sales 2025 vs. 2024
(in millions) Sep 27,
2025 		Sep 28,
2024 		GAAP Currency Impact Acquisition Impact Sep 27,
2025 		Sep 28,
2024 		GAAP Currency Impact Acquisition Impact
Propulsion $ 535.4 $ 485.9 10.2 % 0.9 % - % $ 1,620.6 $ 1,622.1 (0.1) % (0.3) % - %
Engine P&A 363.7 336.1 8.2 % 0.5 % - % 956.8 934.6 2.4 % (0.1) % - %
Navico Group 186.9 184.1 1.5 % 1.4 % - % 597.4 605.1 (1.3) % 0.5 % - %
Boat 360.2 345.3 4.3 % 0.4 % 0.4 % 1,137.9 1,205.2 (5.6) % - % 0.7 %
Segment Eliminations (86.0) (78.1) 10.1 % 0.2 % - % (283.7) (284.8) (0.4) % (0.1) % - %
Total $ 1,360.2 $ 1,273.3 6.8 % 0.7 % 0.2 % $ 4,029.0 $ 4,082.2 (1.3) % - % 0.2 %
Results of Operations
Consolidated
The following table sets forth certain amounts, ratios, and relationships calculated from the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended:
Three Months Ended 2025 vs. 2024 Nine Months Ended 2025 vs. 2024
(in millions, except per share data) Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change 		Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change
Net sales $ 1,360.2 $ 1,273.3 $ 86.9 6.8% $ 4,029.0 $ 4,082.2 $ (53.2) (1.3)%
Gross margin(A)
350.8 333.0 17.8 5.3% 1,024.4 1,097.6 (73.2) (6.7)%
Restructuring, exit, and impairment charges 333.8 12.2 321.6 NM 342.9 33.6 309.3 NM
Operating (loss) earnings (242.2) 98.4 (340.6) NM (82.6) 367.3 (449.9) NM
Net (loss) earnings from continuing operations (234.3) 47.3 (281.6) NM (154.5) 220.5 (375.0) NM
Diluted (loss) earnings per common share from continuing operations $ (3.57) $ 0.71 $ (4.28) NM $ (2.34) $ 3.26 $ (5.60) NM
Expressed as a percentage of Net sales:
Gross margin(A)
25.8 % 26.2 % (40) bps 25.4 % 26.9 % (150) bps
Selling, general, and administrative expense 15.9 % 14.2 % 170 bps 15.9 % 13.9 % 200 bps
Research and development expense 3.2 % 3.3 % (10) bps 3.1 % 3.2 % (10) bps
Restructuring, exit, and impairment charges 24.5 % 1.0 % NM 8.5 % 0.8 % 770 bps
Operating margin (17.8) % 7.7 % NM (2.1) % 9.0 % NM
bps = basis points
(A)Gross margin is defined as Net sales less Cost of sales as presented in the Condensed Consolidated Statements of Comprehensive Income.
The following is a reconciliation of our non-GAAP measures, adjusted operating earnings and adjusted diluted earnings per common share from continuing operations for the three and nine months ended September 27, 2025 when compared with the same prior year comparative period:
Three Months Ended Nine Months Ended
Operating Earnings Diluted Earnings Per Share Operating Earnings Diluted Earnings Per Share
(in millions, except per share data) Sep 27,
2025 		Sep 28,
2024 		Sep 27,
2025 		Sep 28,
2024 		Sep 27,
2025 		Sep 28,
2024 		Sep 27,
2025 		Sep 28,
2024
GAAP $ (242.2) $ 98.4 $ (3.57) $ 0.71 $ (82.6) $ 367.3 $ (2.34) $ 3.26
Restructuring, exit, and impairment charges 333.8 12.2 4.88 0.13 342.9 33.6 4.96 0.37
Purchase accounting amortization 14.8 14.5 0.31 0.17 44.1 43.8 0.64 0.49
Acquisition, integration, and IT related costs - 0.9 - 0.01 0.1 3.3 - 0.04
IT security incident costs (A)
- (0.1) - - - 0.2 - -
Loss on early extinguishment of debt - - 0.01 - - - 0.05 -
Special tax items - - (0.66) 0.14 - - (0.62) 0.14
Release of dissolved entity foreign currency translation - - - 0.01 - - - 0.01
As Adjusted $ 106.4 $ 125.9 $ 0.97 $ 1.17 $ 304.5 $ 448.2 $ 2.69 $ 4.31
GAAP operating margin (17.8) % 7.7 % (2.1) % 9.0 %
Adjusted operating margin 7.8 % 9.9 % 7.6 % 11.0 %
(A) We incurred non-recurring costs related to the 2023 IT security incident during the nine months ended September 28, 2024.
Net sales increased 7 percent during the third quarter of 2025 and decreased slightly during the nine months ended September 27, 2025 when compared with the same prior year periods. The components of the consolidated net sales change were as follows:
Percent change in net sales compared to the prior comparative period
September 27, 2025
Three Months Ended Nine Months Ended
Volume 4.0 % (3.8) %
Product Mix and Price 1.9 % 2.3 %
Currency 0.7 % - %
Acquisitions 0.2 % 0.2 %
6.8 % (1.3) %
Gross margin decreased 40 basis points in the third quarter of 2025 when compared to the same prior year period, driven by increased labor costs (98 bps), material inflation (263 bps), and foreign currency exchange-rate fluctuations (20 bps), partially offset by favorable absorption (158 bps) and increased sales (183 bps).
Gross margin decreased 150 basis points in the nine months ended September 27, 2025 when compared to the same prior year period, driven by lower absorption from decreased production levels (59 bps) and material inflation (142 bps), partially offset by favorable foreign currency exchange-rate fluctuations (30 bps) and labor costs (21 bps).
Selling, general and administrative expense as a percentage of net sales increased 170 basis points during the third quarter of 2025 when compared with the same prior year period due to reinstatement of variable compensation. Research and development expense slightly increased in the third quarter of 2025 versus the same period in 2024.
Selling, general and administrative expense as a percentage of net sales increased 200 basis points during the nine months ended September 27, 2025 when compared with the same prior year period due to lower sales (18 bps) and reinstatement of variable compensation (182 bps). Research and development expense decreased in nine months ended September 27, 2025 versus the nine months ended September 28, 2024.
We recorded Restructuring, exit and impairment charges of $333.8 million and $342.9 million during the three and nine months ended September 27, 2025, respectively. We recorded Restructuring, exit and impairment charges of $12.2 million and $33.6 million during the three and nine months ended September 28, 2024, respectively. We estimate 2025 actions to date will result in approximately $14.0 million of annualized cost savings. Refer to Note 3 -Restructuring, Exit, and Impairment Activitiesin the Notes to Condensed Consolidated Financial Statements for further information.
We recorded Equity earnings of $1.5 million and $5.4 million in the three and nine months ended September 27, 2025, respectively, which were primarily related to our marine and technology-related joint ventures. This compares with Equity earnings of $1.6 million and $7.0 million in the three and nine months ended September 28, 2024, respectively.
We recognized $(0.4) million and $(0.5) million of Other expense, net in the three and nine months ended September 27, 2025, respectively. This compares with $(1.1) million and $(1.9) million of Other expense, net in the three and nine months ended September 28, 2024, respectively. Other expense, net primarily includes remeasurement gains and losses resulting from changes in foreign currency rates and other post-retirement benefit costs.
Net interest expense decreased for the three and nine months ended September 27, 2025 when compared with the same prior year period. We also recognized a loss on early extinguishment of debt during the nine months ended September 27, 2025, related to the redemption of our 2049 Notes. Refer to Note 12 - Debtin the Notes to Condensed Consolidated Financial Statements and Note 14 - Debt in the Notes to Consolidated Financial Statements in the 2024 Form 10-K.
We recognized an Income tax (benefit) provision for the three and nine months ended September 27, 2025 of $(32.0) million and $(8.4) million compared to $22.6 million and $68.9 million for the three and nine months ended September 28, 2024, respectively. The decrease in the Income tax (benefit) provision for the three and nine months ended September 27, 2025 is due to lower pretax income, including the impact of impairments. We have also evaluated the effects of Pillar Two legislation and concluded that the tax effects are not material to the financial statements.
The effective tax rate, which is calculated as the Income tax (benefit) provision as a percentage of (Loss) earnings before income taxes, was 12.0 percent and 5.2 percent for the three and nine months ended September 27, 2025, respectively. The effective tax rate for the three and nine months ended September 28, 2024, was 32.3 percent and 23.8 percent, respectively. Refer to Note 11 - Income Taxes in the Notes to Condensed Consolidated Financial Statements for further information.
Due to the factors described in the preceding paragraphs, Operating (loss) earnings, Net (loss) earnings from continuing operations, and Diluted earnings per common share from continuing operations decreased during both the three and nine months ended September 27, 2025 when compared with the same prior year period.
Propulsion Segment
The following table sets forth Propulsion segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2025 vs. 2024 Nine Months Ended 2025 vs. 2024
(in millions) Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change 		Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change
Net sales $ 535.4 $ 485.9 $ 49.5 10.2% $ 1,620.6 $ 1,622.1 $ (1.5) (0.1)%
GAAP operating earnings $ 45.1 $ 50.1 $ (5.0) (10.0)% $ 157.0 $ 218.5 $ (61.5) (28.1)%
Restructuring, exit and impairment charges - 2.9 (2.9) NM 1.2 8.9 (7.7) (86.5)%
Purchase accounting amortization 0.3 0.3 - NM 0.9 1.2 (0.3) (25.0)%
Acquisition, integration, and IT related costs - 0.3 (0.3) NM 0.1 1.2 (1.1) (91.7)%
Adjusted operating earnings $ 45.4 $ 53.6 $ (8.2) (15.3)% $ 159.2 $ 229.8 $ (70.6) (30.7)%
GAAP operating margin 8.4 % 10.3 % (190) bps 9.7 % 13.5 % (380) bps
Adjusted operating margin 8.5 % 11.0 % (250) bps 9.8 % 14.2 % (440) bps
NM = not meaningful
bps = basis points
Propulsion segment's net sales increased in the third quarter of 2025 compared to the third quarter of 2024, primarily resulting from strong OEM orders in a low field inventory environment, together with continued robust market share.
Propulsion segment's net sales slightly decreased in the nine months ended September 27, 2025 versus the nine months ended September 28, 2024 as the third quarter increase only partially offset first half impacts from pipeline management and lower wholesale shipments to OEM boat builder customers.
The components of the Propulsion segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
September 27, 2025
Three Months Ended Nine Months Ended
Volume 7.4 % (3.3) %
Product Mix and Price 1.9 % 3.5 %
Currency 0.9 % (0.3) %
10.2 % (0.1) %
International sales were 36 percent of the Propulsion segment's net sales in the third quarter of 2025 and increased 8 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased 6 percent.
International sales were 37 percent of Propulsion segment's net sales in the nine months ended September 27, 2025 and increased 3 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased 4 percent.
Propulsion segment's operating earnings in the third quarter of 2025 decreased when compared to the third quarter of 2024 due to the impact of the reinstatement of variable compensation, and unfavorable tariffs partially offset by improved absorption driven by higher production during the quarter.
Operating earnings for the nine month ended September 27, 2025 decreased when compared to the nine months ended September 28, 2024 due to the impact of reinstatement of variable compensation and unfavorable tariffs.
Engine P&A Segment
The following table sets forth Engine P&A segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2025 vs. 2024 Nine Months Ended 2025 vs. 2024
(in millions) Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change 		Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change
Net sales $ 363.7 $ 336.1 $ 27.6 8.2% $ 956.8 $ 934.6 $ 22.2 2.4%
GAAP operating earnings $ 82.4 $ 86.3 $ (3.9) (4.5)% $ 193.2 $ 195.1 $ (1.9) (1.0)%
Restructuring, exit, and impairment charges - 0.8 (0.8) NM 0.4 4.3 (3.9) (90.7)%
Adjusted operating earnings $ 82.4 $ 87.1 $ (4.7) (5.4)% $ 193.6 $ 199.4 $ (5.8) (2.9)%
GAAP operating margin 22.7 % 25.7 % (300) bps 20.2 % 20.9 % (70) bps
Adjusted operating margin 22.7 % 25.9 % (320) bps 20.2 % 21.3 % (110) bps
NM = not meaningful
bps = basis points
Engine P&A segment's net sales increased in the third quarter of 2025 compared to the third quarter of 2024, due to benefits from late-season weather in many regions and market share gains in our distribution business.
Engine P&A segment's net sales increased during the nine months ended September 27, 2025 versus the nine months ended September 28, 2024 due to the same factors listed above.
The components of the Engine P&A segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
September 27, 2025
Three Months Ended Nine Months Ended
Volume 6.4 % 2.1 %
Product Mix and Price 1.3 % 0.4 %
Currency 0.5 % (0.1) %
8.2 % 2.4 %
International sales were 29 percent of the Engine P&A segment's net sales in the third quarter of 2025 and increased 6 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased 4 percent from the prior year.
International sales were 28 percent of Engine P&A segment's net sales in the nine months ended September 27, 2025 and decreased 1 percent from the prior year on a GAAP basis. On a constant currency basis, international sales were flat.
Engine P&A segment's operating earnings in the third quarter of 2025decreased compared to the third quarter of 2024, due to the impact of reinstated variable compensation and tariffs.
Operating earnings for the nine months ended September 27, 2025 decreased due to the same factors listed above.
Navico Group Segment
The following table sets forth Navico Group segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2025 vs. 2024 Nine Months Ended 2025 vs. 2024
(in millions) Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change 		Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change
Net sales $ 186.9 $ 184.1 $ 2.8 1.5% $ 597.4 $ 605.1 $ (7.7) (1.3)%
GAAP operating loss $ (328.9) $ (8.7) $ (320.2) NM $ (339.3) $ (14.1) $ (325.2) NM
Restructuring, exit, and impairment charges 324.3 4.5 319.8 NM 330.2 12.5 317.7 NM
Purchase accounting amortization 13.4 13.3 0.1 0.8% 39.9 39.7 0.2 0.5%
Acquisition, integration, and IT related costs - - - -% - 1.7 (1.7) NM
Adjusted operating earnings $ 8.8 $ 9.1 $ (0.3) (3.3)% $ 30.8 $ 39.8 $ (9.0) (22.6)%
GAAP operating margin NM (4.7) % NM (56.8) % (2.3) % NM
Adjusted operating margin 4.7 % 4.9 % (20) bps 5.2 % 6.6 % (140) bps
NM = not meaningful
bps = basis points
Navico Group segment's net sales increased in the third quarter of 2025 compared to the third quarter of 2024, led by growth in its electronics portfolio.
Navico Group segment's net sales decreased for the nine months ended September 27, 2025 versus prior year as third quarter results only partially offset the first half impact of lower sales to marine OEMs.
The components of the Navico Group segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
September 27, 2025
Three Months Ended Nine Months Ended
Volume (3.4) % (3.3) %
Product Mix and Price 3.5 % 1.5 %
Currency 1.4 % 0.5 %
1.5 % (1.3) %
International sales were 42 percent of the Navico Group segment's net sales in the third quarter of 2025 and were flat from the prior year on a GAAP basis. On a constant currency basis, international sales decreased 3 percent.
International sales were 42 percent of the Navico Group segment's net sales in the nine months ended September 27, 2025 and were flat on a GAAP basis. On constant currency basis, international sales decreased 1 percent.
Navico Group segment's operating (loss) earnings in the third quarter of 2025 decreased when compared to the third quarter of 2024 due to non-cash, intangible asset impairment charges along with the impact from tariffs and the variable compensation reset, partially offset by growth in sales and improved gross margins.
Operating earnings for the nine months ended September 27, 2025 decreased due to the same factors listed above.
Boat Segment
The following table sets forth Boat segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2025 vs. 2024 Nine Months Ended 2025 vs. 2024
(in millions) Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change 		Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change
Net sales $ 360.2 $ 345.3 $ 14.9 4.3% $ 1,137.9 $ 1,205.2 $ (67.3) (5.6)%
GAAP operating earnings $ (3.3) $ (0.1) $ (3.2) NM $ 15.5 $ 54.1 $ (38.6) (71.3)%
Restructuring, exit, and impairment charges 9.3 2.9 6.4 NM 10.6 5.6 5.0 89.3%
Purchase accounting amortization 1.1 0.9 0.2 22.2% 3.3 2.9 0.4 13.8%
Acquisition, integration, and IT related costs - 0.6 (0.6) NM - 0.4 (0.4) NM
Adjusted operating earnings $ 7.1 $ 4.3 $ 2.8 65.1% $ 29.4 $ 63.0 $ (33.6) (53.3)%
GAAP operating margin -0.9 % (0.0) % (90) bps 1.4 % 4.5 % (310) bps
Adjusted operating margin 2.0 % 1.2 % 80 bps 2.6 % 5.2 % (260) bps
NM = not meaningful
bps = basis points
Boat segment's net sales increased in the third quarter of 2025 compared to the third quarter of 2024, resulting from improved retail sales in the quarter pulling through steady wholesale orders.
Boat segment's net sales decreased in the nine months ended September 27, 2025 versus the nine months ended September 28, 2024 as third quarter results only partially offset first half cautious wholesale ordering patterns.
The components of the Boat segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
September 27, 2025
Three Months Ended Nine Months Ended
Volume - % (8.0) %
Product Mix and Price 3.5 % 1.7 %
Currency 0.4 % - %
Acquisitions 0.4 % 0.7 %
4.3 % (5.6) %
International sales were 19 percent of the Boat segment's net sales in the third quarter of 2025 and increased 23 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased by 21 percent.
International sales were 19 percent of the Boat segment's net sales in the nine months ended September 27, 2025 and decreased 10 percent from the prior year on both a GAAP basis and constant currency basis.
Boat segment's operating earnings in the third quarter of 2025 decreased when compared to the third quarter of 2024, as the impact of the tariffs and the variable compensation reset were only partially offset by increased net sales.
Boat segment's operating earnings for the nine months ended September 27, 2025 decreased due to the same factors listed above.
Corporate/Other
The following table sets forth Corporate/Other results and a reconciliation to our non-GAAP measure of adjusted operating loss for the three and nine months ended:
Three Months Ended 2025 vs. 2024 Nine Months Ended 2025 vs. 2024
(in millions) Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change 		Sep 27,
2025 		Sep 28,
2024 		$
Change 		%
Change
GAAP operating loss $ (37.5) $ (29.2) $ (8.3) 28.4% $ (109.0) $ (86.3) $ (22.7) 26.3%
Restructuring, exit, and impairment charges 0.2 1.1 (0.9) (81.8)% 0.5 2.3 (1.8) (78.3)%
IT security incident costs - (0.1) 0.1 NM - 0.2 (0.2) NM
Adjusted operating loss $ (37.3) $ (28.2) $ (9.1) 32.3% $ (108.5) $ (83.8) $ (24.7) 29.5%
NM = not meaningful
Corporate operating loss in the third quarter of 2025 increased compared to the third quarter of 2024 due to the impact of reinstated variable compensation.
Corporate operating loss for the nine months ended September 27, 2025 increased due to the same factors listed above.
Cash Flow, Liquidity and Capital Resources
The following table sets forth an analysis of free cash flow for the nine months ended:
(in millions) Sep 27,
2025 		Sep 28,
2024
Net cash provided by operating activities of continuing operations $ 451.1 $ 137.5
Net cash (used for) provided by:
Plus: Capital expenditures (116.5) (137.1)
Plus: Proceeds from the sale of property, plant, and equipment 8.8 8.2
Plus: Effect of exchange rate changes on cash and cash equivalents 11.2 (2.0)
Total free cash flow (A)
$ 354.6 $ 6.6
(A) We define "Free cash flow" as cash flow from operating and investing activities of continuing operations (excluding cash provided by or used for acquisitions, investments, purchases or sales/maturities of marketable securities and other investing activities, net of tax) and the effect of exchange rate changes on cash and cash equivalents. Free cash flow is not intended as an alternative measure of cash flow from operations, as determined in accordance with GAAP in the United States. We use this financial measure both in presenting our results to shareholders and the investment community and in our internal evaluation and management of our businesses. We believe that this financial measure and the information it provides are useful to investors because it permits investors to view our performance using the same tool that we use to gauge progress in achieving our goals. We believe that the non-GAAP financial measure "Free cash flow" is also useful to investors because it is an indication of cash flow that may be available to fund investments in future growth initiatives.
Our major sources of funds for capital investments, acquisitions, share repurchase programs and dividend payments are cash generated from operating activities, available cash and marketable securities balances, divestitures and borrowings. We evaluate potential acquisitions, divestitures and joint ventures in the ordinary course of business.
2025 Cash Flow
Net cash provided by operating activities of continuing operations in the nine months ended September 27, 2025 totaled $451.1 million compared to $137.5 million in the nine months ended September 28, 2024. The improvement is primarily due to working capital usage in the prior year. Working capital is defined as Accounts and notes receivable, Inventories and Prepaid expenses and other, net of Accounts payable and Accrued expenses as presented in the Condensed Consolidated Balance Sheets, excluding the impact of acquisitions and non-cash adjustments.
The primary drivers of net cash provided by operating activities of continuing operations in the nine months ended September 27, 2025 was net (loss) earnings, net of non-cash items, and working capital. Accrued expenses increased $56.7 million, due to reinstatement of variable compensation, Accounts payable increased $16.0 million, due to timing of payments, inventory decreased $34.7 million due to reduced production, and Accounts and notes receivable increased $40.5 million, primarily due to higher sales and timing of collections.
Net cash used for investing activities was $97.5 million and primarily related to $116.5 million of capital expenditures. Our capital spending was focused on investments in new products and technologies.
Net cash used for financing activities was $313.2 million and primarily related to repayments of short-term debt, repayments of long-term debt, dividends paid to common shareholders and common stock repurchases, partially offset by the net proceeds from issuances of short-term debt.
Liquidity and Capital Resources
We view our highly liquid assets as of September 27, 2025, December 31, 2024 and September 28, 2024 as:
(in millions) September 27,
2025 		December 31,
2024 		September 28,
2024
Cash and cash equivalents, at cost, which approximates fair value $ 297.7 $ 269.0 $ 284.1
Short-term investments in marketable securities 0.8 0.8 0.8
Total cash, cash equivalents, and marketable securities $ 298.5 $ 269.8 $ 284.9
The following table sets forth an analysis of total liquidity as of September 27, 2025, December 31, 2024 and September 28, 2024:
(in millions) September 27,
2025 		December 31,
2024 		September 28,
2024
Cash, cash equivalents and marketable securities $ 298.5 $ 269.8 $ 284.9
Amounts available under lending facility (A)
997.0 997.0 747.0
Total liquidity (B)
$ 1,295.5 $ 1,266.8 $ 1,031.9
(A) See Note 12 - Debtin the Notes to Condensed Consolidated Financial Statements for further details on our lending facility.
(B) We define Total liquidity as Cash and cash equivalents and Short-term investments in marketable securities as presented in the Condensed Consolidated Balance Sheets, plus amounts available for borrowing under our lending facilities. Total liquidity is not intended as an alternative measure to Cash and cash equivalents and Short-term investments in marketable securities as determined in accordance with GAAP in the United States. We use this financial measure both in presenting our results to shareholders and the investment community and in our internal evaluation and management of our businesses. We believe that this financial measure and the information it provides are useful to investors because it permits investors to view our performance using the same metric that we use to gauge progress in achieving our goals. We believe that the non-GAAP financial measure "Total liquidity" is also useful to investors because it is an indication of our available highly liquid assets and immediate sources of financing.
Cash, cash equivalents and marketable securities totaled $298.5 million as of September 27, 2025, an increase of $28.7 million from $269.8 million as of December 31, 2024, and an increase of $13.6 million from $284.9 million as of September 28, 2024. Total debt as of September 27, 2025, December 31, 2024 and September 28, 2024 was $2,193.2 million, $2,340.6 million and $2,571.9 million, respectively. Our debt-to-capitalization ratio was 57 percent as of September 27, 2025 compared to 55 percent as of December 31, 2024 and 56 percent as of September 28, 2024.
There were no borrowings under the Revolving Credit Agreement (Credit Facility) during the nine months ended September 27, 2025 and we did not have any borrowings outstanding as of September 27, 2025. Available borrowing capacity under the Credit Facility as of September 27, 2025 totaled $997.0 million, net of $3.0 million of letters of credit outstanding. During the nine months ended September 27, 2025, the maximum amount utilized under the CP Program was $445.5 million, and as of September 27, 2025, the Company had $90.0 million of borrowings outstanding under the CP Program. Refer toNote 12 - Debtin the Notes to Condensed Consolidated Financial Statements and Note 14 - Debt in the Notes to Consolidated Financial Statements in the 2024 Form 10-K, for further details.
The levels of borrowing capacity under our Credit Facility and CP Program are limited by both a leverage and interest coverage test. These covenants also pertain to termination provisions included in our wholesale financing joint-venture arrangements with Wells Fargo Commercial Distribution Finance. Based on our anticipated earnings generation throughout the year, we expect to maintain sufficient cushion against the existing debt covenants.
2025 Capital Strategy
We are anticipating approximately $200 million of debt reduction, $150 million of capital expenditures, and share repurchases in excess of $80 million for the year.
Financing Joint Venture
Details of our Financing Joint Venture are outlined in the 2024 Form10-K. There have been no material changes in our Financing Joint Venture since December 31, 2024.
Off-Balance Sheet Arrangements and Contractual Obligations
Our off-balance sheet arrangements and contractual obligations as of December 31, 2024 are detailed in the 2024 Form10-K. There have been no material changes in these arrangements and obligations outside the ordinary course of business since December 31, 2024.
Environmental Regulation
There were no material changes in our environmental regulatory requirements since the filing of our 2024 Form
10-K.
Critical Accounting Policies
There were no material changes in our critical accounting policies since the filing of our 2024 Form 10-K.
As discussed in the 2024 Form 10-K, the preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and revenues and expenses during the periods reported. Actual results may differ from those estimates.
Recent Accounting Pronouncements
Recent accounting pronouncements that have been adopted during the nine months ended September 27, 2025, or will be adopted in future periods, are included in Note 1 - Significant Accounting Policiesin the Notes to Condensed Consolidated Financial Statements.
Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections about Brunswick's business and by their nature address matters that are, to different degrees, uncertain. Words such as "may," "could," "should," "expect," "anticipate," "project," "position," "intend," "target," "plan," "seek," "estimate," "believe," "predict," "outlook," "will," and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this report. These risks include, but are not limited to: the effect of adverse general economic conditions, including rising interest rates, and the amount of disposable income consumers have available for discretionary spending; changes to trade policy and tariffs, including retaliatory tariffs; changes in currency exchange rates; fiscal and monetary policy changes; adverse capital market conditions; competitive pricing pressures; higher energy and fuel costs; managing our manufacturing footprint and operations; loss of key customers; international business risks, geopolitical tensions or conflicts, sanctions, embargoes, or other regulations; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties; supplier manufacturing constraints, increased demand for shipping carriers, and transportation disruptions; adverse weather conditions, climate change events and other catastrophic event risks; our ability to develop new and innovative products and services at a competitive price; absorbing fixed costs in production; our ability to meet demand in a rapidly changing environment; public health emergencies or pandemics; our ability to successfully implement our strategic plan and growth initiatives; attracting and retaining skilled labor, implementing succession plans for key leadership, and executing organizational and leadership changes; our ability to integrate acquisitions and the risk for associated disruption to our business; the risk that restructuring or strategic divestitures will not provide business benefits; our ability to identify and complete targeted acquisitions; maintaining effective distribution; dealer and customer ability to access adequate financing; inventory reductions by dealers, retailers, or independent boat builders; requirements for us to repurchase inventory; risks related to the Freedom Boat Club franchise business model; outages, breaches, or other cybersecurity events regarding our technology systems, which have affected and could further affect manufacturing and business operations and could result in lost or stolen information and associated remediation costs; our ability to protect our brands and intellectual property; an impairment to the value of goodwill and other assets; product liability, warranty, and other claims risks; legal, environmental, and other regulatory compliance, including increased costs, fines, and reputational risks; risks associated with joint ventures that do not operate solely for our benefit; changes in income tax legislation or enforcement; managing our share repurchases; and risks associated with certain divisive shareholder activist actions.
Additional risk factors are included in the 2024 Form 10-K, in subsequent Quarterly Reports on Form 10-Q, and may be further updated in our filings with the SEC. Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
Brunswick Corporation published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 19:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]