Brunswick Announces Amendment to Revolving Credit Facility
December 19 2008 - 3:24PM
PR Newswire (US)
LAKE FOREST, Ill., Dec. 19 /PRNewswire-FirstCall/ -- Brunswick
Corporation (NYSE:BC) announced today that it and a group of
financial institutions have completed amending the company's
revolving credit facility. In light of the current economic and
credit climates, Brunswick had sought various changes to the credit
facility to ensure access to this short-term funding source. "The
completion of the amendment is an important step for Brunswick,
providing us with liquidity and financial flexibility going
forward," explained Brunswick Chairman and Chief Executive Officer
Dustan E. McCoy. "We believe the amount available under this
facility, combined with the cash on our balance sheet as well as
recent and future cost savings efforts, should provide us the
necessary liquidity to manage effectively through these difficult
market and economic conditions." As part of this amendment, the
facility was converted into a secured asset-based facility, and its
size was established at $400 million. Borrowings under the facility
are subject to the value of the borrowing base, consisting of
certain receivables, inventory, and machinery and equipment of the
company's domestic subsidiaries. The facility contains a minimum
fixed- charges coverage covenant, which is effective when
borrowings are within $60 million of the total borrowing capacity
available under the facility. There are presently no borrowings
under the facility; however, there are previously issued letters of
credit, which total approximately $88 million. The amendment to the
facility, which remains in place through May 2012, was led by J.P.
Morgan Securities Inc. "This facility is consistent with our
current business needs in terms of size and structure," McCoy said.
"It provides access to an important source of liquidity, should we
need to supplement our own vigorous cash management efforts, to
fund anticipated working capital needs going forward." Additional
information concerning the revolving credit facility, including the
entire Amended and Restated Credit Agreement, can be found under
the related Form 8-K filing. Joint venture agreement also modified
In addition to this amended credit facility, Brunswick Financial
Services has also entered into an agreement with GE Capital
Solutions (NYSE:GE) to amend the terms of its joint venture
agreement. The amendment is necessitated by the new terms of the
revolving credit facility, and will synchronize the key financial
covenant in each agreement. The joint venture, Brunswick Acceptance
Company (BAC), began operations in 2003, with the current agreement
in place through 2014. BAC provides wholesale floor plan financing
for qualifying Brunswick marine dealers. Additional Form 8-K filed
The company also announced that it has filed a separate Form 8-K
concerning its previously issued financial statements for the three
months and nine months ended Sept. 27, 2008 (the "September 27
financials"). In preparing for its year-end 2008 financial
statements, the company has determined that it had incorrectly
determined the valuation allowance against deferred tax assets when
it prepared the September 27 financials and, accordingly, will need
to increase its deferred tax valuation allowance as prescribed by
the Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." This special tax item is a non-cash
charge and did not affect the company's operating loss or operating
cash flows for the three months and nine months ended Sept. 27,
2008. As a result, the company intends to file amended financial
statements in a Form 10-Q/A for the three and nine month periods
ended Sept. 27, 2008 and Sept. 29, 2007 no later than Jan. 30,
2009. 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,
products and services; the ability to successfully complete
restructuring efforts in the timeframe and cost anticipated; the
ability to successfully complete the disposition of non-core
assets; 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; 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 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 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; and the effect of
weather conditions on demand for marine products and retail bowling
center revenues. 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 Sept. 27, 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; Albemarle, Arvor, Bayliner,
Bermuda, Boston Whaler, Cabo Yachts, Crestliner, Cypress Cay,
Harris, Hatteras, Kayot, Lowe, Lund, Maxum, Meridian, Ornvik,
Princecraft, Quicksilver, Rayglass, 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: Bruce Byots, Vice President - Corporate and
Investor Relations, +1-847-735-4612, or Dan Kubera, Director -
Media Relations and Corporate Communications, +1-847-735-4617, ,
both of Brunswick Web site: http://www.brunswick.com/
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