Corporate and Financial
Brunswick Lowers Production and EPS Estimates Citing Weak Retail Marine Market
LAKE FOREST, Ill., July 20 /PRNewswire-FirstCall/ -- Brunswick Corporation
(NYSE: BC) today announced it was lowering production of marine products in
the second half of 2007 due to continued weakness in retail markets in the
United States.
"Preliminary industry data indicates that retail sales are down by as much
as 13 percent in our key category of sterndrive and inboard powered fiberglass
boats in the second quarter, which historically represents the strongest
period of the selling season," said Brunswick Chairman and Chief Executive
Officer Dustan E. McCoy. "In an effort to manage our pipeline inventories, we
have been reducing both our production levels and our wholesale shipments of
boats. Through the first half of the year, wholesale shipments have been
significantly below levels in the same period a year ago, as well as below
2007 retail sales. Despite our actions, however, with the anemic retail
demand for sterndrive and inboard fiberglass boats we have not made meaningful
progress in reducing our pipeline inventories for these products. We also see
no reason to believe that retail trends will reverse in the second half of the
year, which is the slowest period for boat sales. As we go into the 2008
model year, which began July 1, commitments received from our dealers support
our view of the retail environment. To ensure the continued health of the
company and that of our distribution network, we are reducing further
production levels for both boats and engines."
The company said it will report its final financial results for the second
quarter of 2007 on Thursday, July 26, before the market opens, but expects to
report diluted earnings per share from continuing operations of $0.64 to
$0.65. Primarily due to the lower production levels planned for the second
half of the year, the company is reducing its earnings estimate for 2007 to a
range of $1.20 to $1.35 per diluted share from continuing operations. This
reflects the effect of lower sales and lower fixed-cost absorption from the
production cuts, among other factors. Previously, the company had estimated
diluted earnings per share from continuing operations of $1.65 to $2.00 for
2007.
Conference Called Scheduled
The company said a conference call with investors has been scheduled for
10 a.m. CDT today, hosted by McCoy, Peter G. Leemputte, senior vice president
and chief financial officer, and Kathryn J. Chieger, vice president -
corporate and investor relations. The call will be broadcast over the Internet
at http://www.brunswick.com .
To listen to the call, go to the Web site at least 15 minutes before the
call to register, download and install any needed audio software. Security
analysts and investors wishing to participate via telephone should call 888-
730-9138 (passcode: Brunswick). Callers outside of North America should call
+1-773-756-4700 to be connected. These numbers can be accessed 15 minutes
before the call begins, as well as during the call. A replay of the conference
call will be available through midnight CDT Friday, July 27, 2007, by dialing
866-495-2417 if calling from the United States, or by dialing +1-203-369-1755
if calling from outside the United States. The replay will also be available
at http://www.brunswick.com .
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 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; 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 the company's 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 2006 and Quarterly Report on Form 10-Q for the
quarter ended March 31, 2007.
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, Crestliner, Harris, Hatteras, Kayot, 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
CONTACT: Kathryn Chieger, Vice President - Corporate and Investor
Relations of Brunswick Corporation, +1-847-735-4612
Web site: http://www.brunswick.com
