

| Release: |
IMMEDIATE
RELEASE
|
|
Contact:
|
Bruce
Byots
|
|
Vice
President – Corporate and Investor Relations
|
|
|
Phone:
|
847-735-4612
|
|
Contact:
|
Daniel
Kubera
|
|
Director
– Media Relations and Corporate Communications
|
|
|
Phone:
|
847-735-4617
|
|
Email:
|
daniel.kubera@brunswick.com
|
|
·
|
Total
sales of $665.8 million were down 36 percent versus 2008, primarily the
result of marine sales that dropped by 40 percent from year-ago
levels.
|
|
·
|
A
net loss of $114.3 million, or $1.29 per diluted share, which includes
$0.32 per diluted share of restructuring charges, and $0.24 per diluted
share of benefits from special tax
items.
|
|
·
|
Cash
totaled $624.1 million, up from the 2008 year-end balance of $317.5
million.
|
|
·
|
Pipeline
reduction and inventory management strategies led to lower dealer
inventory levels and company cash flow benefits, while having a negative
impact on the company’s revenue and
earnings.
|
|
Brunswick
Corporation
|
||||||||||||
|
Comparative
Consolidated Statements of Operations
|
||||||||||||
|
(in
millions, except per share data)
|
||||||||||||
|
(unaudited)
|
||||||||||||
|
Three
Months Ended
|
||||||||||||
|
Oct.
3,
|
Sept.
27,
|
|||||||||||
|
2009
|
2008
|
%
Change
|
||||||||||
|
Net
sales
|
$ | 665.8 | $ | 1,038.8 | -36% | |||||||
|
Cost
of sales
|
590.2 | 862.3 | -32% | |||||||||
|
Selling,
general and administrative expense
|
136.7 | 177.4 | -23% | |||||||||
|
Research
and development expense
|
19.5 | 31.2 | -38% | |||||||||
|
Goodwill
impairment charges
|
- | 374.0 |
NM
|
|||||||||
|
Trade
name impairment charges
|
- | 121.1 |
NM
|
|||||||||
|
Restructuring,
exit and impairment charges
|
28.8 | 39.1 | -26% | |||||||||
|
Operating
loss
|
(109.4 | ) | (566.3 | ) | 81% | |||||||
|
Equity
loss
|
(3.8 | ) | (1.0 | ) |
NM
|
|||||||
|
Investment
sale gain
|
- | 2.1 |
NM
|
|||||||||
|
Other
income (expense), net
|
0.3 | (0.3 | ) |
NM
|
||||||||
|
Loss
before interest and income taxes
|
(112.9 | ) | (565.5 | ) | 80% | |||||||
|
Interest
expense
|
(23.7 | ) | (12.7 | ) | -87% | |||||||
|
Interest
income
|
0.7 | 2.5 | -72% | |||||||||
|
Loss
before income taxes
|
(135.9 | ) | (575.7 | ) | 76% | |||||||
|
Income
tax (benefit) provision
|
(21.6 | ) | 153.4 | |||||||||
|
Net
loss
|
$ | (114.3 | ) | $ | (729.1 | ) | 84% | |||||
|
Loss
per common share:
|
||||||||||||
|
Basic
|
$ | (1.29 | ) | $ | (8.26 | ) | ||||||
|
Diluted
|
$ | (1.29 | ) | $ | (8.26 | ) | ||||||
|
Weighted
average shares used for computation of:
|
||||||||||||
|
Basic
loss per common share
|
88.4 | 88.3 | ||||||||||
|
Diluted
loss per common share
|
88.4 | 88.3 | ||||||||||
|
Effective
tax rate
|
15.9% | -26.7% | ||||||||||
|
Supplemental Information
|
||||||||||||
|
Diluted
net loss
|
$ | (1.29 | ) | $ | (8.26 | ) | ||||||
|
Restructuring,
exit and impairment charges (1)
|
0.32 | 0.28 | ||||||||||
|
Goodwill
impairment
|
- | 3.37 | ||||||||||
|
Trade
name impairment
|
- | 0.94 | ||||||||||
|
Special
tax items
|
(0.24 | ) | 3.34 | |||||||||
|
Diluted
net loss, as adjusted
|
$ | (1.21 | ) | $ | (0.33 | ) | ||||||
|
(1) The 2009
Restructuring, exit and impairment charges assume no tax benefit, while
the 2008 Restructuring, exit and impairment charges include
a tax benefit.
|
||||||||||||
|
Brunswick
Corporation
|
||||||||||||
|
Comparative
Consolidated Statements of Operations
|
||||||||||||
|
(in
millions, except per share data)
|
||||||||||||
|
(unaudited)
|
||||||||||||
|
Nine
Months Ended
|
||||||||||||
|
Oct.
3,
|
Sept.
27,
|
|||||||||||
|
2009
|
2008
|
%
Change
|
||||||||||
|
Net
sales
|
$ | 2,118.8 | $ | 3,871.0 | -45% | |||||||
|
Cost
of sales
|
1,878.0 | 3,121.5 | -40% | |||||||||
|
Selling,
general and administrative expense
|
454.5 | 586.1 | -22% | |||||||||
|
Research
and development expense
|
64.7 | 97.1 | -33% | |||||||||
|
Goodwill
impairment charges
|
- | 377.2 |
NM
|
|||||||||
|
Trade
name impairment charges
|
- | 133.9 |
NM
|
|||||||||
|
Restructuring,
exit and impairment charges
|
103.9 | 128.4 | -19% | |||||||||
|
Operating
loss
|
(382.3 | ) | (573.2 | ) | 33% | |||||||
|
Equity
earnings (loss)
|
(11.1 | ) | 10.1 |
NM
|
||||||||
|
Investment
sale gain
|
- | 23.0 |
NM
|
|||||||||
|
Other
income (expense), net
|
(1.3 | ) | 1.6 |
NM
|
||||||||
|
Loss
before interest and income taxes
|
(394.7 | ) | (538.5 | ) | 27% | |||||||
|
Interest
expense
|
(60.2 | ) | (35.6 | ) | -69% | |||||||
|
Interest
income
|
2.2 | 5.4 | -59% | |||||||||
|
Loss
before income taxes
|
(452.7 | ) | (568.7 | ) | 20% | |||||||
|
Income
tax expense
|
9.5 | 153.1 | ||||||||||
|
Net
loss
|
$ | (462.2 | ) | $ | (721.8 | ) | 36% | |||||
|
Loss
per common share:
|
||||||||||||
|
Basic
|
$ | (5.23 | ) | $ | (8.18 | ) | ||||||
|
Diluted
|
$ | (5.23 | ) | $ | (8.18 | ) | ||||||
|
Weighted
average shares used for computation of:
|
||||||||||||
|
Basic
loss per common share
|
88.4 | 88.3 | ||||||||||
|
Diluted
loss per common share
|
88.4 | 88.3 | ||||||||||
|
Effective
tax rate
|
-2.1% | -26.9% | ||||||||||
|
Supplemental Information
|
||||||||||||
|
Diluted
net loss
|
$ | (5.23 | ) | $ | (8.18 | ) | ||||||
|
Restructuring,
exit and impairment charges (1)
|
1.17 | 0.91 | ||||||||||
|
Goodwill
impairment
|
- | 3.40 | ||||||||||
|
Trade
name impairment
|
- | 1.03 | ||||||||||
|
Investment
sale gain, net of tax
|
- | (0.11 | ) | |||||||||
|
Special
tax items
|
0.12 | 3.31 | ||||||||||
|
Diluted
net earnings (loss), as adjusted
|
$ | (3.94 | ) | $ | 0.36 | |||||||
|
(1) The 2009
Restructuring, exit and impairment charges assume no tax benefit, while
the 2008 Restructuring, exit and impairment charges include a tax
benefit.
|
||||||||||||
|
Brunswick
Corporation
|
|||||||||||||||||||||||||||||||||
|
Selected
Financial Information
|
|||||||||||||||||||||||||||||||||
|
(in
millions)
|
|||||||||||||||||||||||||||||||||
|
(unaudited)
|
|||||||||||||||||||||||||||||||||
|
Segment
Information
(1)
|
|||||||||||||||||||||||||||||||||
|
Three
Months Ended
|
|||||||||||||||||||||||||||||||||
| Net Sales |
Operating
Earnings (Loss)
(2)
|
Operating
Margin
|
|||||||||||||||||||||||||||||||
|
Oct.
3,
|
Sept.
27,
|
%
|
Oct.
3,
|
Sept.
27,
|
%
|
Oct.
3,
|
Sept.
27,
|
||||||||||||||||||||||||||
|
2009
|
2008
|
Change
|
2009
|
2008
|
Change
|
2009
|
2008
|
||||||||||||||||||||||||||
|
Marine
Engine
|
$ | 363.5 | $ | 515.2 | -29% | $ | (13.4 | ) | $ | (9.7 | ) | -38% | -3.7% | -1.9% | |||||||||||||||||||
|
Boat
|
118.2 | 314.2 | -62% | (86.7 | ) | (536.3 | ) | 84% | -73.4% |
NM
|
|||||||||||||||||||||||
|
Marine
eliminations
|
(20.1 | ) | (63.4 | ) | - | - | |||||||||||||||||||||||||||
| Total Marine | 461.6 | 766.0 | -40% | (100.1 | ) | (546.0 | ) | 82% | -21.7% | -71.3% | |||||||||||||||||||||||
|
Fitness
|
126.8 | 161.6 | -22% | 12.5 | 10.3 | 21% | 9.9% | 6.4% | |||||||||||||||||||||||||
|
Bowling
& Billiards
|
77.5 | 111.1 | -30% | (3.8 | ) | (10.4 | ) | 63% | -4.9% | -9.4% | |||||||||||||||||||||||
|
Eliminations
|
(0.1 | ) | 0.1 | - | - | ||||||||||||||||||||||||||||
|
Corp/Other
|
- | - | (18.0 | ) | (20.2 | ) | 11% | ||||||||||||||||||||||||||
| Total | $ | 665.8 | $ | 1,038.8 | -36% | $ | (109.4 | ) | $ | (566.3 | ) | 81% | -16.4% | -54.5% | |||||||||||||||||||
|
Nine
Months Ended
|
|||||||||||||||||||||||||||||||||
| Net Sales |
Operating
Earnings (Loss)
(3)
|
Operating
Margin
|
|||||||||||||||||||||||||||||||
|
Oct.
3,
|
Sept.
27,
|
%
|
Oct.
3,
|
Sept.
27,
|
%
|
Oct.
3,
|
Sept.
27,
|
||||||||||||||||||||||||||
| 2009 | 2008 |
Change
|
2009 | 2008 |
Change
|
2009 | 2008 | ||||||||||||||||||||||||||
|
Marine
Engine
|
$ | 1,122.6 | $ | 1,867.4 | -40% | $ | (71.8 | ) | $ | 82.8 |
NM
|
-6.4% | 4.4% | ||||||||||||||||||||
|
Boat
|
462.3 | 1,471.5 | -69% | (266.9 | ) | (595.9 | ) | 55% | -57.7% | -40.5% | |||||||||||||||||||||||
|
Marine
eliminations
|
(71.2 | ) | (270.6 | ) | - | - | |||||||||||||||||||||||||||
| Total Marine | 1,513.7 | 3,068.3 | -51% | (338.7 | ) | (513.1 | ) | 34% | -22.4% | -16.7% | |||||||||||||||||||||||
|
Fitness
|
350.4 | 467.7 | -25% | 13.0 | 26.6 | -51% | 3.7% | 5.7% | |||||||||||||||||||||||||
|
Bowling
& Billiards
|
254.8 | 335.1 | -24% | 0.9 | (29.3 | ) |
NM
|
0.4% | -8.7% | ||||||||||||||||||||||||
|
Eliminations
|
(0.1 | ) | (0.1 | ) | - | - | |||||||||||||||||||||||||||
|
Corp/Other
|
- | - | (57.5 | ) | (57.4 | ) | 0% | ||||||||||||||||||||||||||
| Total | $ | 2,118.8 | $ | 3,871.0 | -45% | $ | (382.3 | ) | $ | (573.2 | ) | 33% | -18.0% | -14.8% | |||||||||||||||||||
|
(1)
|
During
the first quarter of 2009, the company realigned the management of its
marine service, parts and accessories businesses. The Boat segment's parts
and accessories businesses of Attwood, Land 'N' Sea, Benrock, Inc.,
Kellogg Marine, Inc. and Diversified Marine Products, L.P. are now being
managed by the Marine Engine segment's service and parts business leaders.
As a result, the parts and accessories businesses operating results
previously reported in the Boat segment are now being reported in the
Marine Engine segment. Segment results have been restated for all periods
presented to reflect the change in Brunswick’s reported
segments.
|
||||||||||||||||
|
(2)
|
Operating
earnings (loss) in the third quarter of 2009 includes $28.8 million of
pretax restructuring, exit and impairment charges. The $28.8 million
charge consists of $18.8 million in the Marine Engine segment, $6.6
million in the Boat segment, $0.4 million in the Fitness segment, $0.8
million in the Bowling & Billiards segment and $2.2 million in
Corp/Other. Operating earnings (loss) in the third quarter of 2008
includes $534.2 million of pretax restructuring, exit and impairment
charges. The $534.2 million charge consists of $18.6 million in the Marine
Engine segment, $491.6 million in the Boat segment, $0.8 million in the
Fitness segment, $15.4 million in the Bowling & Billiards segment and
$7.8 million in Corp/Other.
|
||||||||||||||||
|
(3)
|
Operating
earnings (loss) in the first nine months of 2009 includes $103.9 million
of pretax restructuring, exit and impairment charges. The $103.9 million
consists of $40.1 million in the Marine Engine segment, $49.5 million in
the Boat segment, $1.6 million in the Fitness segment, $4.8 million in the
Bowling & Billiards segment and $7.9 million in Corp/Other. Operating
earnings (loss) in the first nine months of 2008 includes $639.5 million
of restructuring, exit and impairment charges. The $639.5 million consists
of $37.7 million in the Marine Engine segment, $543.0 million in the Boat
segment, $2.1 million in the Fitness segment, $40.8 million in the Bowling
& Billiards segment and $15.9 million in
Corp/Other.
|
||||||||||||||||
|
Brunswick
Corporation
|
||||||
|
Comparative
Condensed Consolidated Balance Sheets
|
||||||
|
(in
millions)
|
||||||
|
Oct.
3,
|
December
31,
|
Sept.
27,
|
||||
|
2009
|
2008
|
2008
|
||||
|
(unaudited)
|
(unaudited)
|
|||||
|
Assets
|
||||||
|
Current
assets
|
||||||
|
Cash
and cash equivalents
|
$ 624.1
|
$ 317.5
|
$ 342.9
|
|||
|
Accounts
and notes receivables, net
|
368.2
|
444.8
|
518.3
|
|||
|
Inventories
|
||||||
|
Finished
goods
|
238.8
|
457.7
|
475.9
|
|||
|
Work-in-process
|
182.9
|
248.2
|
291.1
|
|||
|
Raw
materials
|
81.5
|
105.8
|
131.1
|
|||
|
Net
inventories
|
503.2
|
811.7
|
898.1
|
|||
|
Deferred
income taxes
|
13.1
|
103.2
|
39.2
|
|||
|
Prepaid
expenses and other
|
34.6
|
59.7
|
75.2
|
|||
|
Current
assets
|
1,543.2
|
1,736.9
|
1,873.7
|
|||
|
Net
property
|
798.4
|
917.6
|
970.3
|
|||
|
Other
assets
|
||||||
|
Goodwill,
net
|
292.6
|
290.9
|
294.8
|
|||
|
Other
intangibles, net
|
78.5
|
86.6
|
89.9
|
|||
|
Investments
|
57.8
|
75.4
|
81.6
|
|||
|
Non-current
deferred tax asset
|
-
|
-
|
14.8
|
|||
|
Other
long-term assets
|
109.9
|
116.5
|
140.8
|
|||
|
Other
assets
|
538.8
|
569.4
|
621.9
|
|||
|
Total
assets
|
$ 2,880.4
|
$ 3,223.9
|
$ 3,465.9
|
|||
|
Liabilities
and shareholders' equity
|
||||||
|
Current
liabilities
|
||||||
|
Short-term
debt
|
$ 11.5
|
$ 3.2
|
$ 0.3
|
|||
|
Accounts
payable
|
232.6
|
301.3
|
346.8
|
|||
|
Accrued
expenses
|
628.4
|
696.7
|
791.7
|
|||
|
Current
liabilities
|
872.5
|
1,001.2
|
1,138.8
|
|||
|
Long-term
debt
|
904.8
|
728.5
|
726.4
|
|||
|
Other
long-term liabilities
|
767.3
|
764.3
|
422.1
|
|||
|
Shareholders'
equity
|
335.8
|
729.9
|
1,178.6
|
|||
|
Total
liabilities and shareholders' equity
|
$ 2,880.4
|
$ 3,223.9
|
$ 3,465.9
|
|||
|
Supplemental Information
|
||||||
|
Debt-to-capitalization
rate
|
73.2%
|
50.1%
|
38.1%
|
|||
|
Brunswick
Corporation
|
||||||||
|
Comparative
Condensed Consolidated Statements of Cash Flows
|
||||||||
|
(in
millions)
|
||||||||
|
(unaudited)
|
||||||||
|
Nine
Months Ended
|
||||||||
|
October
3,
|
September
27,
|
|||||||
|
2009
|
2008
|
|||||||
|
Cash
flows from operating activities
|
||||||||
|
Net
loss
|
$ | (462.2 | ) | $ | (721.8 | ) | ||
|
Depreciation
and amortization
|
119.8 | 133.1 | ||||||
|
Pension
|
58.7 | 4.8 | ||||||
|
Deferred
income taxes
|
9.9 | 0.1 | ||||||
|
Provision
for doubtful accounts
|
33.1 | 18.8 | ||||||
|
Goodwill,
trade name, and other long-lived asset impairment charges
|
18.0 | 561.1 | ||||||
|
Changes
in non-cash current assets and current liabilities
|
314.3 | (113.9 | ) | |||||
|
Change
due to repurchase of accounts receivable
|
(84.2 | ) | - | |||||
|
Income
taxes
|
90.6 | 159.9 | ||||||
|
Other,
net
|
32.1 | (21.9 | ) | |||||
|
Net
cash provided by operating activities
|
130.1 | 20.2 | ||||||
|
Cash
flows from investing activities
|
||||||||
|
Capital
expenditures
|
(20.2 | ) | (84.8 | ) | ||||
|
Investments
|
7.5 | 21.1 | ||||||
|
Proceeds
from investment sale
|
- | 45.5 | ||||||
|
Proceeds
from sale of property, plant and equipment
|
11.7 | 9.6 | ||||||
|
Other,
net
|
1.9 | 0.2 | ||||||
|
Net
cash provided by (used for) investing activities
|
0.9 | (8.4 | ) | |||||
|
Cash
flows from financing activities
|
||||||||
|
Net
issuances of short-term debt
|
8.3 | - | ||||||
|
Proceeds
from asset-based lending facility
|
81.1 | - | ||||||
|
Payments
of asset-based lending facility
|
(81.1 | ) | - | |||||
|
Net
proceeds from issuance of long-term debt
|
329.9 | 250.4 | ||||||
|
Payments
of long-term debt including current maturities
|
(162.6 | ) | (250.7 | ) | ||||
|
Net
cash provided by (used for) financing activities
|
175.6 | (0.3 | ) | |||||
|
Net
increase in cash and cash equivalents
|
306.6 | 11.5 | ||||||
|
Cash
and cash equivalents at beginning of period
|
317.5 | 331.4 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 624.1 | $ | 342.9 | ||||
|
Free
Cash Flow
|
||||||||
|
Net
cash provided by operating activities
|
$ | 130.1 | $ | 20.2 | ||||
|
Net
cash provided by (used for):
|
||||||||
|
Capital
expenditures
|
(20.2 | ) | (84.8 | ) | ||||
|
Proceeds
from investment sale
|
- | 45.5 | ||||||
|
Proceeds
from sale of property, plant and equipment
|
11.7 | 9.6 | ||||||
|
Other,
net
|
1.9 | 0.2 | ||||||
|
Total
free cash flow
|
$ | 123.5 | $ | (9.3 | ) | |||