Corporate and Financial
Brunswick Comments on Rating Agency Action
LAKE FOREST, Ill., July 8 /PRNewswire-FirstCall/ -- Brunswick Corporation
(NYSE: BC) commented today on the announcement by Standard & Poor's Rating
Services (S&P) that it had lowered its corporate credit rating on Brunswick
from BBB- to BB+. Brunswick issued the following statement:
We do not believe today's announcement by S&P will have any
significant effect on Brunswick. Both our strong balance sheet and
ability to generate cash provide us with substantial liquidity and serve
us well in economic circumstances such as those affecting the United
States. We will continue to focus on operating our businesses well in
these market conditions.
Brunswick Acceptance Company, our joint venture with a subsidiary of
General Electric Capital Corporation that provides dealer floor-plan
financing, is unaffected by this announcement. We are, and expect to
remain, in compliance with the financial requirements of the joint
venture agreement, in spite of the weak market environment. The venture
was recently renewed and extended through June 2014.
With regard to our $650 million revolving credit facility, there are
no borrowing constraints resulting from the ratings action. We currently
do not anticipate any borrowings under the facility for the remainder of
2008. Looking forward, Brunswick anticipates amending the revolving
credit agreement to enhance our ability to remain in compliance with the
facility's leverage covenant and to ensure sufficient borrowing capacity
if the present U.S. recreational marine market downturn continues into
2009. We also intend to refinance our $250 million senior unsubordinated
floating rate notes due 2009.
We will continue to execute our previously announced plans to resize
our company and reduce fixed costs by $300 million. Brunswick expects to
generate positive cash flow in 2008 and to end the year with cash in
excess of $400 million, up from $267 million at the end of the first
quarter of 2008.
Forward-Looking Statements
Certain statements in this news release are forward looking as defined in
the Private Securities Litigation Reform Act of 1995. These statements
involve certain risks and uncertainties that may cause actual results to
differ materially from expectations as of the date of this news release.
These risks include, but are not limited to: the effect of (i) the amount of
disposable income available to consumers for discretionary purchases, and (ii)
the level of consumer confidence on the demand for marine, fitness, billiards
and bowling equipment and products; the ability to successfully complete
restructuring efforts in the timeframe and cost anticipated; the ability to
amend or maintain credit facilities on terms favorable to the company; the
ability of the company's operations to generate expected financial results and
levels of cash flow; the effect of higher product prices due to technology
changes and added product features and components on consumer demand; the
effect of competition from other leisure pursuits on the level of
participation in boating, fitness, bowling and billiards activities; the
effect of interest rates and fuel prices on demand for marine products; the
ability to successfully manage pipeline inventories; the financial strength of
dealers, distributors and independent boat builders and their ability to
obtain financing for the purchase of company product; the ability to maintain
mutually beneficial relationships with dealers, distributors and independent
boat builders; the ability to maintain effective distribution and to develop
alternative distribution channels without disrupting incumbent distribution
partners; the ability to maintain market share, particularly in high-margin
products; the success of new product introductions; the success of marketing
and cost management programs; the ability to maintain product quality and
service standards expected by customers; competitive pricing pressures; the
ability to develop cost-effective product technologies that comply with
regulatory requirements; the ability to transition and ramp up certain
manufacturing operations within time and budgets allowed; the ability to
successfully develop and distribute products differentiated for the global
marketplace; shifts in currency exchange rates; adverse foreign economic
conditions; the ability to repay or refinance existing indebtedness when it
becomes due; the success of global sourcing and supply chain initiatives; the
ability to obtain components and raw materials from suppliers; increased
competition from Asian competitors; competition from new technologies; the
ability to complete environmental remediation efforts and resolve claims and
litigation at the cost estimated; the effect of weather conditions on demand
for marine products and retail bowling center revenues; and the ability to
successfully integrate acquisitions. Additional factors are included in the
company's Annual Report on Form 10-K for 2007 and Quarterly Report on Form
10-Q for the quarter ended March 29, 2008.
About Brunswick
Headquartered in Lake Forest, Ill., Brunswick Corporation endeavors to
instill "Genuine Ingenuity"(TM) in all its leading consumer brands, including
Mercury and Mariner outboard engines; Mercury MerCruiser sterndrives and
inboard engines; MotorGuide trolling motors; Teignbridge propellers; MotoTron
electronic controls; Albemarle, Arvor, Bayliner, Bermuda, Boston Whaler, Cabo
Yachts, Crestliner, Cypress Cay, Harris, Hatteras, Kayot, Lowe, Lund, Maxum,
Meridian, Ornvik, Princecraft, Quicksilver, Rayglass, Savage, Sea Ray,
Sealine, Triton, Trophy, Uttern and Valiant boats; Attwood marine parts and
accessories; Land 'N' Sea, Kellogg Marine, Diversified Marine and Benrock
parts and accessories distributors; IDS dealer management systems; Life
Fitness, Hammer Strength and ParaBody fitness equipment; Brunswick bowling
centers, equipment and consumer products; Brunswick billiards tables; and
Dynamo, Tornado and Valley pool tables, Air Hockey and foosball tables. For
more information, visit http://www.brunswick.com.
SOURCE: Brunswick Corporation
CONTACT: Kathryn Chieger, Vice President - Corporate and Investor
Relations, +1-847-735-4612, or Daniel Kubera, Director - Media Relations and
Corporate Communications, +1-847-735-4617, daniel.kubera@brunswick.com, both
of Brunswick Corporation
Web site: http://www.brunswick.com
