Brunswick Comments on Rating Agency Action
July 08 2008 - 7:52PM
PR Newswire (US)
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/. DATASOURCE:
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, , both of Brunswick Corporation Web site:
http://www.brunswick.com/
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