BRUNSWICK
LOWERS PRODUCTION
AND
EPS ESTIMATES CITING WEAK RETAIL MARINE MARKET
LAKE
FOREST, Ill., July 20,
2007 – 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"™ 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
.
