Corporate and Financial
Brunswick's Proposed Sale of BNT Affected By Changing Market Conditions
LAKE FOREST, Ill., Dec 11, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Brunswick Corporation
(NYSE: BC) today announced that it is facing increasingly challenging market
conditions in the highly competitive portable navigation device (PND) segment,
which is affecting the operating performance of its Brunswick New Technologies
(BNT) unit and Brunswick's ability to dispose of BNT at or above book value.
In April 2006, Brunswick announced its intent to sell BNT, which includes
fleet management, marine electronics and PND products sold under the Navman,
Northstar and MX Marine brands.
"BNT is an amalgamation of electronics businesses primarily based on GPS
technologies," explained Dustan E. McCoy, Brunswick chairman and chief
executive officer. "As we announced earlier this year, we no longer view
ownership of BNT as a strategic imperative and choose to free up resources to
more intently focus on our core business segments -- marine, fitness, bowling
and billiards -- and long-term strategic objectives."
Increased competition and pricing pressures in the PND market segment are
adversely affecting the operating results of BNT's PND business in the
important fourth quarter holiday selling season. Based on the performance of
this operation and very recent discussions with potential buyers, the company
has concluded that proceeds from the sale of BNT will be less than its book
value. These conditions will result in a non-cash asset impairment charge
estimated in the range of $70 million to $95 million in the fourth quarter,
primarily driven by the PND business.
"Over the past two months, we have experienced a significant change in the
market dynamics for PND products, primarily in Europe where Navman holds the
number-three market share position," McCoy continued. "While we've said all
year that the market is becoming increasingly competitive, in November alone
we witnessed an even greater level of price discounting, which has adversely
affected our PND business unit."
"Nevertheless, we are continuing with the sales process for the PND
business as well as the marine electronics and fleet management units, the
latter two of which continue to perform at or above expected levels," McCoy
said.
Forward-Looking Statements
Certain statements in this press 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 filing. These
risks include, but are not limited to: the effect of a weak economy and stock
market on consumer confidence and thus the demand for marine, fitness,
billiards and bowling equipment and products; competitive pricing pressures;
the success of new product introductions; the ability to maintain market share
in high-margin products; competition from new technologies; competition in the
consumer electronics markets; imports from Asia and increased competition from
Asian competitors; the ability to obtain component parts from suppliers; the
ability to maintain effective distribution; the financial strength of dealers,
distributors and independent boat builders; the ability to transition and ramp
up certain manufacturing operations within time and budgets allowed; the
ability to maintain product quality and service standards expected by our
customers; the ability to successfully manage pipeline inventories; the
success of global sourcing and supply chain initiatives; the ability to
successfully integrate acquisitions; the ability to successfully complete
announced divestitures; the success of marketing and cost management programs;
the ability to develop product technologies that comply with regulatory
requirements; the ability to complete environmental remediation efforts and
resolve claims and litigation at the cost estimated; the impact of weather
conditions on demand for marine products and retail bowling center revenues;
shifts in currency exchange rates; adverse foreign economic conditions; and
the impact of interest rates and fuel prices on demand for marine products.
Additional factors are included in the company's Annual Report on Form 10-K
for 2005 and Quarterly Report on Form 10-Q for the quarter ended Sept. 30,
2006.
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, Baja, Bayliner, Bermuda, Boston Whaler,
Cabo Yachts, Crestliner, HarrisKayot, Hatteras, Laguna, Lowe, Lund, Maxum,
Meridian, Ornvik, Palmetto, Princecraft, Quicksilver, Savage, Sea Boss, Sea
Pro, 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 Valley-Dynamo pool, Air Hockey and foosball tables. For more information,
visit http://www.brunswick.com.
SOURCE: Brunswick Corporation
Kathryn Chieger, Vice President - Corporate and Investor Relations, +1-847-735-4612
http://www.brunswick.com
